WORK AND WEALTH 



THE MACMILLAN COMPANY 

NEW YORK • BOSTON • CHICAGO • DALLAS 
ATLANTA • SAN FRANCISCO 

MACMILLAN & CO., Limited 

LONDON • BOMBAY • CALCUTTA 
MELBOURNE 

THE MACMILLAN CO. OF CANADA, LxD. 

TORONTO 



WORK AND WEALTH 



A HUMAN VALUATION 



V y. BY 

■A u- ' 



jy /^ HOBSON 



AUTHOR OF THE INDUSTRIAL SYSTEM," " THE EVOLUTION OF 
MODERN CAPITALISM," ETC. 



THE MACMILLAN COMPANY 
1914 

All rights reserved 






^-\ 



Copyright, 1914, 

By J. A. HOBSON 

Set up and electrotyped. Published May, 1914 



@)C1,A376240 

7 



PREFACE 

The goods and services that constitute our national income 
are valued severally and collectively with a fair amount of 
accuracy in terms of money. For a gold standard, though by no 
means perfect for the work of monetary measurement, is stable 
and has a single definite meaning to all men. By means of it we 
can estimate the rates of growth or decline in our industry, as 
an aggregate or in its several departments, and the quantities of 
output and consumption of the various products. We can com- 
pare the growth of our national wealth with that of other nations. 

But how far can these measurements of concrete wealth fur- 
nish rehable information regarding the vital values, the human 
welfare, which all economic processes are designed to yield? 
Though it will be generally admitted that every increase of 
economic wealth is in some measure conducive to welfare, every 
decrease to illfare, nobody will pretend even approximately to 
declare what that measure is, or to lay down any expUcit rules 
relating wealth to welfare, either for an individual or a nation. 
Indeed, even the general assumption that every growth of wealth 
enhances welfare cannot be admitted without quahfication. An 
injurious excess of income is possible for an individual, perhaps 
for a nation, and the national welfare which an increased volume 
of wealth seems capable of yielding might be more than cancelled 
by a distribution which bestowed upon a few an increased share 
of the larger wealth, or by an aggravation of the toil of the pro- 
ducers. 

Such obvious considerations drive us to seek some intelligible 
and consistent method of human valuation for economic goods 
and processes. To find a standard of human welfare as stable 
and as generally acceptable as the monetary standard is mani- 
festly impossible. Indeed, the difficulties attending any sort 
of calculus of vital values might appear insuperable, were it not 
for one reflection. Every statesman, social reformer, philan- 



vi PREFACE 

thropist, every public-spirited citizen, does possess and apply 
to the conduct of affairs some such standard or criterion as we are 
seeking. Some notion or idea, more or less clear and explicit, of 
the general welfare, crossed and blurred no doubt by other in- 
terests and passions, is an operative and directive influence in his 
policy. Moreover, though idiosyncrasies will ever3rwhere affect 
this operative ideal, there will be found among persons of widely 
different minds and dispositions a substantial body of agreement 
in their meaning of human welfare. The common social environ- 
ment partly evokes, partly imposes, this agreement. In fact, all 
cooperative work for social progress imphes the existence of some 
such standard as we are seeking. The complex image of human 
values which it contains is always slowly changing, and varies 
somewhat among different sorts and conditions of men. But for 
the interpretation of economic goods and processes it has, at any 
time, a real vaHdity. For it is anchored to certain solid founda- 
tions of human nature, the needs and functions to which, alike 
in the individual and in the society, we give the term 'organic' 

Only by considering the organic nature of man and of human 
society can we trace an intelligible order in the evolution of 
industry. The wants of man, and therefore the economic opera- 
tions serving them must be treated as organic processes. This 
term, borrowed from biology, must be extended so as to cover 
the entire physical and spiritual structure of human society, for 
no other term is so well fitted to describe the nature of the federal 
unity which society presents. The standard of values thus set 
up is the current estimate of 'organic welfare.' 

The justification of these terms and of this mode of human 
valuation is to be found in their application to the task before 
us. These tools will be found to do the work better than any 
others that are available. 

In seeking to translate economic values into human by refer- 
ence to such a standard of organic welfare, I take as the aptest 
material for experiment the aggregate of goods and services that 
constitute the real income of the British nation. In order to re- 
duce that income to terms of human welfare, I first examine 
separately the economic costs of production and the economic 
utilities of consumption which meet in this concrete wealth, 



PREFACE vU 

analysing them into human cost and human utility, the debit 
and credit sides of the account of welfare. Analysis of the pro- 
ductive processes will, of course, disclose the fact that not all 
'economic' costs have human costs attached to them, but that 
human utiHties of varying value inhere in many sorts of pro- 
ductive work. Surveying the different orders of productive 
energy, from the finest arts to the lowest modes of routine toil, 
we discover that any two bodies of economic wealth, possessing 
the same pecuniary value, may differ enormously in the quantity 
of human cost they carry. For that cost will depend upon the 
nature of the work, the nature of the workers, and the distribu- 
tion of the work among the workers. This line of enquiry opens 
out, in form at any rate, a complete criticism of current English 
industry, from the humanist standpoint. A similar analysis 
appHed on the consumption side resolves the economic utility 
of the goods and services into human utility. Here again out 
of economic utiHties much human cost emerges, just as out of 
economic costs much human utility. Equal quantities of income 
yield in their consumption widely diverse quantities of human 
utility or welfare. 

Piecing together the two sides of our enquiry into the produc- 
tion and consumption of the income, we perceive, as might be 
expected, that a sound human economy conforms to the organic 
law of distribution, * from each according to his power, to each ac- 
cording to his needs,' and that, precisely so far as the current 
processes of economic distribution of work and of its product con- 
travene this organic law, waste accrues and illfare displaces wel- 
fare. The economic distinction between costs and unearned sur- 
plus ^ furnishes in effect a faithful measure of the extent and forms 
of divergence between the economic and the human 'law' of 
distribution. For when this surplus income is traced, backward 
to the human costs involved in its production, forward to the 
human injuries inflicted by the excessive and bad consumption 
it sustains, it is seen to be the direct efficient cause of all the 
human defects in our economic system. Growing in magnitude 
with the development of the modern arts of industry and com- 
merce, it is the concrete embodiment of the social-economic 

^ This distinction is elaborated in my work, The Industrial System (Longmans). 



viii PREFACE 

problem. The absorption and utilisation of the surplus for the 
betterment of the working-classes and the enrichment of public 
life are essential conditions for the humanisation of industry. 

The first half of the book is occupied with the general exposi- 
tion and illustration of this method of human valuation. The 
second part appHes the humanist principles thus established, to 
the discussion of some of the great practical issues of social- 
economic reconstruction in the fields of business and poHtics. 
The medley of overlapping conflicts between capital and labour, 
producer and consumer, competition and combination, the in- 
dividual and society, is sifted so as to discover lines of industrial 
reformation based upon a conception of organic harmony. The 
reconstruction of the business, so as adequately to represent in 
its operation the respective interests of capital, ability, labour 
and the consumer, is seen to be the first desideratum of reform. 
Here, as in the wider oppositions between business and business, 
trade and trade, nation and nation (misconceived as economic 
units), the more rational standpoint of a humanist valuation 
suggests modes of reconcilement following an evolution of 
economic structure in which the corporate or cooperative spirit 
finds clearer and stronger expression. The most debated ques- 
tion, how far ordinary human nature can yield economic motives 
to social service strong and reliable enough to enable society 
to dispense with some of the incentives of competitive greed, 
hitherto deemed indispensable supports to industry, is discussed 
in several of the later chapters. The practicable limits of in- 
dustrial reformation are found to depend upon the reality and 
importance assigned to 'the social will' as a power operative for 
industrial purposes, in other words upon the strength of the 
spiritual unity of society. A final chapter is given to a discussion 
of the limitations of the scientific and quantitative methods in the 
interpretation and direction of social-economic life. It is con- 
tended that the art of social as of individual conduct must 
always defy exact scientific guidance, the methods of science 
being incompetent closely to predict or direct the creative ele- 
ment in organic processes. 

The processes of human valuation and judgment, therefore, 
whether applied to industry or to other activities and achieve- 



PREFACE ix 

ments, must ultimately belong to the art rather than to the 
science of society, the statesman and the citizen absorbing and 
assimilating the history of the past which science presents in its 
facts and laws, but using his free constructive faculty to make 
the history of the future. The failures of the individual states- 
man or citizen in the performance of this artistic work are due 
to the fact that a larger artist, whose performance the most en- 
hghtened individual can but sUghtly apprehend, viz. society it- 
self, takes an over-ruHng part in the process. 

This brief presentation of the argument, dwelling unavoidably 
upon intellectual method, may possibly have failed to convey the 
intensely practical purpose which I have kept in mind throughout 
the preparation of the book. That purpose is to present a full and 
formal exposure of the inhumanity and vital waste of modern 
industry by the close appHcation of the best-approved formulas 
of individual and social welfare, and to indicate the most hopeful 
measures of remedy for a society sufficiently intelligent, coura- 
geous and self-governing to apply them. 

Such a work evidently presents a large frontf or hostile criticism. 
Its scope has often compelled a rigorous compression in the dis- 
cussion of important controversial topics, and has precluded all 
entrance upon the more detailed issues in the policy of reconstruc- 
tion. But I venture to hope that many readers, who may disagree 
with the particular valuations and interpretations offered in these 
chapters, will be led to accept the broader outlines of the method 
of human valuation here proposed, and will recognise the im- 
portance of a better application of this method in the solutions 
of the practical problems of economic reform. 

j. a. hobson. 
Hampstead, 

January, 1914. 



TABLE OF CONTENTS 



CHAPTER I „,^^ 

PAGE 

The Human Standard op Value i 

§ I. The need for a human survey. § 2. The attitude of eco- 
nomic science towards the industrial system. § 3. The monetary 
standard of values. § 4. Some inherent defects of Political Econ- 
omy for human valuation. § 5. The humanist standpoint of 
Ruskin. § 6. Ruskin's strength and weakness. § 7. Organic wel- 
fare as a standard. § 8. Society as an organism or an organisa- 
tion? § 9. Defence of the organic concept. 

CHAPTER II 

The Human Origins of Industry 19 

§1. Industry emerging from organic processes. §2. The begin- 
nings of a rational economy. § 3. Utility and self-expression in 
work. § 4. The severance of economic from other human motives. 

CHAPTER III 

Real Income: Cost and Utility 28 

§1. The humanist attitude towards income. §2. The meaning 
of national income. § 3. Failure of pecuniary measurement. 
§ 4. Standard of the humanly desirable. § 5. Human problems of 
production and consumption. § 6. The analysis of cost and util- 
ity. § 7. Economic versus human costs. § 8. The Business as a 
human structure. § 9. Creation and imitation. § 10. Merits and 
defects of the distinction. § 11. Its provisional acceptance. 

CHAPTER IV 

The Creative Factor in Production 44 

§ I. Creation in the fine arts. § 2. Commercialism in art. 
§ 3. Interpretative and executive art. § 4. Discovery and inven- 
tion in the ' useful ' arts. § 5. The economy of the creative faculty. 
§ 6. Professional ability. § 7. Human costs of professional and 

xi 



xii TABLE OF CONTENTS 

PAGE 

official work. § 8. Psychology of the financier and the 'business 
man'. § 9. Risk-taking as a personal cost. 

CHAPTER V 

Human Costs of Industry 60 

§ I . Repetition and routine the essential qualities of labour. § 2. 
The physiology of fatigue. § 3. Nervous fatigue. § 4. Accidents 
and disorders from fatigue. § 5. Ennui and painful efforts. § 6. 
Human costs of conforming to routine. 

CHAPTER VI 

The Reign OF THE Machine 72 

§ I. Cooperation of Labour and Machinery. § 2. Limits to the 
reign of machinery. §3. Direct and indirect influences of the ma- 
chine. § 4. Has machinery lightened or aggravated net human 
costs? 

CHAPTER VII 

The Distribution of Human Costs 79 

§ I. Apportionment of labour according to age, sex, personal ca- 
pacity. § 2. Human waste from labour of the old, the young, the 
weak. § 3. Natural and artificial restrictions on woman's work. 
§ 4. Costs do not always vary with routine. § 5. Summary of 
physical costs. § 6. Moral costs of labour. 

CHAPTER VIII 

Human Costs in the Supply of Capital 89 

§ I. Risk-taking as a physical and psychical cost. § 2. Risks in- 
volved in all productive work. § 3. Costly and costless saving. 
§ 4. Efforts of abstinence and postponement. § 5. Distribution of 
expenditure over time. § 6. The possibiUty of costless capital. 
§ 7. Automatic saving of the rich. § 8. Motives in the saving of 
the thrifty. § 9. Human costs and utilities of thrift. § 10. The 
heavy costs of working-class saving. 

CHAPTER IX 

Human Utility of Consumption 106 

§ I. The human valuation of economic utilities, Wealth and 
'Illth'. § 2. How far the arts of production and consumption 



TABLE OF CONTENTS xiii 

PAGE 

correspond. § 3. Slow evolution of consumptive arts. § 4. Pro- 
duction for profit endangers consumption. § 5. Instinct and rea- 
son in the evolution of wants. § 6. Organic safeguards against 
waste. § 7. Growing waste with rising standards of consumption. 

CHAPTER X 

Class Standards OF Consumption 121 

§ I. Physical environment as a factor in class standards. § 2. 
Industrial conditions afifecting standards. § 3. Conventional ele- 
ments in consumption. § 4. Risks in 'Novelties ' under individual 
choice. § 5. Imitation as a maker of 'conventions'. § 6 . How 
commercial interests damage conventional consumption. § 7. Hu- 
man values in conventional and routine elements. § 8. The play 
of imitative forces. § 9. The modus operandi of prestige. § 10. 
Theory of a leisure class. §11. Futile expenditure. 

CHAPTER XI 

Sport, Culture and Charity .146 

§ I. Sport-activities and survival value. § 2. The exploitation 
of biological utiUty. § 3. Degradation of the sporting life. 
Its prestige. § 4. Intellectual recreations. Decorative culture. 
§ 5. Ethics of the sporting life. § 6. Parody of the lower leisure- 
class. § 7. Race exploitation displacing class exploitation. 

CHAPTER XII 

The Human Law of Distribution 159 

§ I. Human costs and utilities in Production and Consumption. 
§ 2. The same laws of valuation applicable on each side. § 3. 
Statement of the human law. § 4. Income according to needs. 
§ 5. Identity and diversity of needs. § 6. Laissez-faire as a law 
of human distribution. § 7. The new doctrine of Marginahsm, 
§ 8. Its logical and practical defects. § 9. Fundamental diver- 
gence of the economic and human laws. The surplus. § 10. Or- 
igins and nature of the surplus. § 11. Rent element in surplus. 
§ 12. Other contributory sources. § 13. Claims of 'Ability' to 
the surplus. §14. Theory of prizes and blanks. §15. Summary 
of injuries and wastes from the surplus. 



xiv TABLE OF CONTENTS 

CHAPTER XIII 

The Human Claims OF Labour 190 

§ I. The Labour Movement's basis of remuneration. 
§ 2. Ethics and economics of the piece-wage system. § 3. Growth 
of the salary system. § 4. The minimum wage policy. 
5. Lunitation of output. § 6. Public supplements to wages. 

CHAPTER XIV 

Scientific Management 202 

§ I. Science applied to business organization. § 2. Experi- 
mental study of tools, work and workers. § 3. The intensifica- 
tion of labour. § 4. Relation of economic to human costs. § 5. 
Applied psychology. Miinsterberg's experiments. § 6. Selection 
and adjustment of men to jobs. § 7. Will workers gain in wages? 
§ 8. The mechanisation of labour. § 9. Reactions on the progress 
of the industrial arts and standards of life. § 10. Science applied 
to consumption. § 11. Dietaries in relation to work. § 12. Eu- 
genics and education, for work or hfe? § 13. The science of human 
industry. 

CHAPTER XV 

The Distribution of Leisure 228 

§ I. The upper and lower leisured classes. § 2. Under and over- 
employment. § 3. The demand for an Eight Hours Day. § 4. 
Shorter hours in relation to spare energy. § 4. Double injury of 
long work-day, to producer and consumer. § 6. Leisure as the 
opportunity of opportunities. § 7. Leisure as condition of educa- 
tion. § 8. Leisure and invention. § 9. Non-economic values of 
leisure. § 10. The place of leisure in class standards of life. §11. 
Leisure as a social requisite. 

CHAPTER XVI 

The Reconstruction of Industry 250 

§ I. Realisation of the social meaning of labour. § 2. Com- 
petition in trades, businesses and workers. Its dehumanising ef- 
fects. § 3. Harmony and discord between capital and labour. 
§ 4. Experiments in new business structure. § 5. Cooperation 
of Capital and Labour. § 6. The opposition of producer and con- 
sumer. § 7. The cooperative movement as a mode of settlement. 
§ 8. The workers' claim for a share in business control. § 9. The 



TABLE OF CONTENTS xv 

PAGE 

balance of interests in business structure. § lo. The syndicalist 
idea. § ii. Dangers of bureaucracy. 

CHAPTER XVII 

The Nation and the World 272 

§ I. Nations misconceived as economic units. § 2. The idea 
of an economic world-state. § 3. Need for a conscious recogni- 
tion of world industry. 

CHAPTER XVIII 

Social Harmony in Economic Life 276 

§ I. Growing harmony within the Business. § 2. Organisation 
versus competition in the Trade. § 3. States in relation to monopo- 
lies and combines. § 4. The need for international regulation of 
Industry. 

CHAPTER XIX 

Individual Motives to Social Service 283 

§ I. The spiritual assumptions of humanist reforms. § 2. 
Stimulation of industrial motives. § 3. Less 'costly' production 
required. § 4. Limitations of the claims of industry on Ufe. § 5. 
The scope of individualism and private enterprise. § 6. Moral and 
social significance of 'the Surplus.' § 7. Theory of Property as a 
social trust. The test of Charity. § 8. Property set upon a 
'proper' basis. § 9. Beneficial reactions of sound property upon 
other functions. 

CHAPTER XX 

The Social Will as an Economic Force . 301 

§ I. Early stages of reconstruction may involve some economic 
loss. § 2. Esprit de Corps or common consciousness as an economic 
incentive. § 3. Wholesome interaction of better social conscious- 
ness and better social environment. § 4. Ultimate reason for so- 
cialisation of routine industries. § 5. Social life justifies the rou- 
tine work of individuals. § 6. The cells' imperfect realisation of 
the organism. 

CHAPTER XXI 

Personal and Social Efficiency 310 

§ I. The organic law as basis of personal efficiency for pro- 
duction. § 2. Personal efficiency for consumption. § 3. Organic 



xvi TABLE OF CONTENTS 

PAGE 

union of production and consumption. § 4. Will society enslave 
the individual? § 5. Quantity and quality of work. § 6. The 
relations between material and non-material wealth. § 7. Quan- 
tity and quality of life. 

CHAPTER XXII 

Social Science AND Social Art 320 

§ I. 'Enlightened common sense' as a human standard. § 2. 
Limitation of a quantitative calculus. § 3. Quantitative and quali- 
tative facts. § 4. The reduction of qualitative to quantitative 
differences. § 5. Scientific politics. § 6. The case of art-values. 
§ 7. Analysis of utihty of income. § 8. How mutations and nov- 
elty limit science. § 9. Use and abuse of averages. § 10. Sum- 
mary of uses of a scientific calculus. § 11. The services of science 
to human arts. § 12. Final futility of 'marginalism.' The in- 
calculable. § 13. Scientific calculus as guide to conduct. § 14. 
Organic unity imposes values. § 15. Two meanings of social will 
and social value. § 16. Collective instincts in Democracy. § 17. 
General will in instinct and reason. § 18. Creative power in 
collective man. §19. The evolution of a rational social will. 



WORK AND WEALTH 



WORK AND WEALTH 

CHAPTER I 

THE HUMAN STANDARD OF VALUE 

§ I. In an age when human problems of a distinctively eco- 
nomic character, relating to wages, hours of labour, housing, 
employment, taxation, insurance and kindred subjects, are press- 
ing for separate consideration and solution, it is particularly 
important to enforce the need of a general survey of our economic 
system from the standpoint of human values. Social students, of 
course, are justified by considerations of intellectual economy in 
isolating these several problems for certain purposes of detailed 
enquiry. But the broader human setting, demanded for the 
judgment or the poHcy of a statesman or reformer, can never be 
obtained by this separatist treatment. For the interactions which 
relate these issues to one another are nimierous and intimate. 
Taking as the most familiar example the groups of questions re- 
lating to the working-classes, we recognise at once how the 
wages, hours, regularity of employment and other considerations 
of labour, overlap and intertwine, while, again, the questions 
relating to conditions of Hving, such as housing, food, drink, 
education, recreation, facilities of transit, have similar inter- 
relations as factors in a standard of comfort. Nor is it less evi- 
dent that conditions of labour and conditions of living, taken 
severally and in the aggregate, interact in ways that affect the 
efficiency and well-being of the people. 

The special and separate studies of these various problems 
must then, in order to be socially serviceable, be subject to the 
guidance and direction of some general conception which shall 
have regard to all sorts of economic factors and operations, assess- 
ing them by reference to some single standard of the humanly de- 
sirable. This general survey and the application of this single 



2 WORK AND WEALTH 

standard of valuation are necessary alike to a scientific inter- 
pretation of the economic or industrial world and to a conscious 
art of social-economic progress. They must exert a control over 
the division of intellectual labour on the one hand, and over the 
utilisation of such labour for social policy upon the other. The 
notion that, by setting groups of students to work at gathering, 
testing, measuring and tabulating crude facts, relating, say, to 
infant mortality, expenditure on drink, or wages in women's 
industries, valuable truths of wide application will somehow be 
spontaneously generated, and that by a purely inductive process 
there will come to light general laws authoritative for social 
policy, is entirely destitute of foundation. The humblest grubber 
among 'facts' must approach them with some equipment of 
questions, hypotheses, and methods of classification, all of which 
imply the acceptance of principles derived from a wider field of 
thought. The same holds again of the next higher grade of stu- 
dents, the intellectual middlemen who utifise the ' facts ' got by the 
detailed workers 'at the face.' They too must bring wider prin- 
ciples to correlate and to interpret the results got by the humbler 
workers. So at each stage of the inductive process, laws and stan- 
dards derived from a higher intellectual stage are brought to bear. 
Even if such studies were prompted entirely by a disinterested 
desire for knowledge, it is evident that their success implies the 
inspiration and application of some general ideas, which in rela- 
tion to these studies are a priori. But regarding these studies as 
designed primarily to assist the art of social policy, we must 
recognise that the inner prompting motive of every question that 
is put at each stage of such enquiries, the inner regulative prin- 
ciple of the division of labour and of the correlation of the results, 
is the desire to realise some more or less clear conception of gen- 
eral human well-being. It must, of course, be admitted that this 
procedure rests upon a sort of paradox. The general conception 
of human well-being is itself vague and unsubstantial, until it 
has acquired and assimilated the very sorts of knowledge the 
collection of which it is here assumed to be able to direct. This 
paradox, however, is familiar to all who reflect upon the progress 
of knowledge in any department and for any purpose. I only 
name it here in order to anticipate the objection of those dis- 



THE HUMAN STANDARD OF VALUE 3 

posed to question the validity of assuming any sort of standard 
of human welfare, and to insist upon testing each economic 
issue upon what they call 'its own merits.' The application of a 
general survey and a general standard of values is none the less 
a logically valid and a practically useful procedure, because 
the new facts which its application discloses afford more fulness 
and exactitude to the survey, while the standard is itself made 
clearer and more effective thereby. 

Assuming it to be admitted, then, that a human valuation of 
economic processes is possible and desirable, both for the en- 
largement of knowledge and for purposes of social policy, the 
questions next arise, 'How shall we conceive and describe the 
standard of human valuation, and how shall we apply it to the 
interpretation of the present economic system?' 

§ 2. Before facing these questions, however, it will be well to 
have before our minds a clear outline picture of this economic 
system which we seek to value. It consists of two complex 
operations, constantly interacting, known as Production and 
Consumption of wealth. By wealth is understood all sorts of 
vendible goods and services. So far as material wealth is con- 
cerned, it is ' produced ' by a series of processes which convert 
raw materials into finished goods of various sorts and sizes and 
dispose them in such quantities as are required, for the satisfac- 
tion of consumers or as instruments in some further process of 
production. Similarly, in the case of professional, ofiicial, domes- 
tic, industrial, commercial, and other personal services, which 
also rank as wealth,^ a variety of productive processes go to pre- 
pare them and to place them at the disposal of consumers. The 
processes of production may thus be classified as extractive, 
manufacturing, artistic, transport, commercial, professional, 
domestic. Thus it is seen that the work of 'distribution' and 
'exchange,' ^ sometimes distinguished from the work of pro- 
duction, is here included in that category. 

^ Labour employed in productive work of industry is usually excluded from the 
category of national 'wealth', though it is sometimes regarded as 'personal wealth'. 
But there is no sufficient reason for this exclusion. Any increase of the efficiency oi 
the labour of a nation is evidently as much an increase of its total vendible resources 
as an increase in its instrumental capital would be. 

2 Exchange is simply an ordinary branch of production, mainly consisting of 



4 WORK AND WEALTH 

Now, the first difficulty confronting us in our search for a 
human valuation of this economic system consists in the ob- 
scurity in which half this system lies. For though there is every- 
where a formal recognition that consumption is the end or goal 
of industry, there is no admission that the arts of consumption 
are equally important with the arts of production and are de- 
serving of as much attention by students or reformers of our 
'economic system.' On the contrary, so absorbing are the pro- 
ductive processes in their claims upon the physical and mental 
energies of mankind, that the economic system, alike for prac- 
titioners and theorists, has almost come to be identified with 
these processes. This depreciation and neglect of Consumption 
no doubt has been natural enough. So much more conscious 
energy of thought and feeling, and so much more expenditure of 
time and effort have gone into the discovery, development and 
practice of the productive arts. Their practice has involved so 
much more publicity, so much wider and more varied intercourse, 
and therefore so much more organisation. Consumption, on the 
other hand, has been so much more passive in its character, so 
private and individual in the acts which comprise it, so little 
associated with sequences of thought or purpose, that it has 
hardly come to be regarded as an art. Hence, even in the 
more elaborate civilisations where much detailed skill and at- 
tention are devoted to the use and enjoyment of goods and 
services, the neglect of consumptive processes by economic 
science remains almost unimpaired. The arts of production 
remain so much more exacting in their demands upon our 
attention. 

The early influence of this dominance of the productive stand- 
point in economic science has had effects upon the terminology 
and structure of that science which are serious obstacles to the 
human interpretation of industry. Unconsciously, but consis- 
tently, the early structure of the science was built with exclusive 
regard to the industrial or productive processes. The art out of 
which the science grew was concerned with the progress of agricul- 

wholesale and retail trade. Distribution has, of course, another and an important 
economic signification, being applied to the laws determining the apportionment 
of the product. 



THE HUMAN STANDARD OF VALUE 5 

ture, manufacture, and commerce, or with problems of money, 
taxation, and population, regarded mainly or wholly from the 
productive standpoint. The underl3dng assumption everywhere 
was the question, 'How will this or that policy affect the quan- 
tity of wealth produced in the country? ' always with an impor- 
tant corollary to the effect, 'How will it affect the quantity of 
wealth, passing as rents, profits, interest, or wages to the several 
classes of the nation?' But nowhere was there any direct con- 
sideration of the arts of consumption, with one particularly 
instructive exception. The only bit of attention paid by our 
early classical economists to processes of consumption was to 
distinguish 'productive' from 'unproductive' consumption, 
that is, to suggest a valuation of consumption based entirely 
upon its subordination to future purposes of production. Their 
condemnation of luxurious expenditure and waste, alike in the 
wealthy and the working-classes, was not primarily directed 
against the loss of real enjoyment, or human well-being, or the 
moral degradation involved in such abuse of spending power, 
but against the damage to the further processes of making wealth 
by reducing the rate of saving or by impairing the working 
efi&ciency of labour. Though occasional considerations of a more 
distinctively humane or moral character entered into the tirades 
against luxury, or the dietetic advice offered by these economic 
teachers, the main trend of their reflections on the use of wealth 
was quite evidently dominated by considerations of increased 
production. This tendency further impressed itself upon the 
central concept of economic science, that of value, which was 
treated by these early makers of Political Economy exclusively 
from the productive standpoint of 'costs.' When, however, later 
theorists, beginning with Jevons in this country, sought to con- 
vert the formal goal of consumption into the real goal, by sub- 
stituting 'utiHty' for 'cost' as the determinant of value, it might 
have been supposed that they would have been impelled, passing 
through the gateway of utility into consumption, to open up 
that hitherto neglected country. But no such thing has happened. 
While an elaborate division of intellectual labour has been 
applied, both to the study of the objective structure of industry, 
and to the psychology of the various agents of production, no 



6 WORK AND WEALTH 

corresponding studies of consumption have been made. When 
the products of industry pass over the retail counter, economic 
science almost entirely loses count of them. They pass from sight 
into the mysterious maw of 'the Consumer.' It has never 
occurred to the economist that it is Just as important to have a 
clear and close knowledge of what happens to products when 
they have become consumer's goods, as it is to trace their history 
in the productive stages. It would, of course, be untrue to say 
that modern economists completely ignore methods and motives 
of consumption. Their studies of value and of markets compel 
them to direct equal attention to forces regulating Supply and 
Demand, and many of them assign a formal superiority to the 
demand for final commodities which issues from Consxmaers, as 
the regulator of the whole industrial system. But while this has 
evoked some interesting enquiries into quantities and modes of 
consumption, the main interest of these enquiries has lain, not 
in the light they shed upon the use and enjoyment got from con- 
sumption, but in the effects of that consumption upon demand 
as a factor in problems of price and of production. In a word, 
the economic arts of consumption still run in subordination to 
the arts of production, and the very nature of the interest taken 
in them attests their secondary place. Half of the field of ec- 
onomic survey important from the standpoint of human welfare 
thus stands unexplored or ill-explored. 

§ 3. A necessary result of this identification of economic 
subject-matter with the productive apparatus, has been to im- 
pose upon the study of economics a distinctively mechanical 
character. The network of businesses and trades and processes, 
which constitutes industry, may indeed, by an interpretative 
effort of imagination, be resolved into the myriads of thoughts, 
desires and relations which are its spiritual texture. Every 
business, with its varied machinery and plant, its buildings, 
materials, etc., is the embodiment of conscious human effort, 
and the personnel of management and operatives represent a 
Hve current of volition and intelligence, directing and cooperating 
with it. A business, thus regarded, is a distinctively spiritual 
fabric. Nor is this true only of those industries employed in 
fashioning material goods. The complicated arrangements of 



THE HUMAN STANDARD OF VALUE 7 

communications and of commerce with their ganglia of markets, 
by which goods pass from one process to another and are gathered, 
sorted and distributed in regulated channels throughout the 
world of workers and consumers, represent an even more delicate 
adjustment of psychical activities. Economic science tends, un- 
doubtedly, to become less material in its outlook and treatment, 
and to give more attention to the psychological supports of the 
industrial system. Not only have we many special studies of 
such economic questions as saving and investment, business 
administration and other critical operations of will and judgment, 
but in such works as those of M. Tarde in France, and Mr. 
Wicksteed in this country, we find attempts at a systematic 
psychological interpretation of industry. Economics, indeed, 
according to the latter writer, is a branch of the science of 'pref- 
erences,' the application of intelligent human volition to the 
satisfaction of economic wants. 

And yet the science remains distinctively mechanical and 
unfitted for the performance of any human interpretation of in- 
dustry. This is due to the failure of our psychological econ- 
omists to tear themselves free from the traditions of a Political 
Economy v/hich in its very structure has made man subservient 
to marketable wealth. The accepted conception of the Art of 
Political Economy is that it is directed to the production of 
wealth whose value is attested by the purely quantitative cal- 
culus of money, and the Science of PoHtical Economy is virtually 
confined to discovering and formulating the laws for the produc- 
tion of such wealth. The basic concepts of Value, Cost, and 
Utility, are subjected to this governing presupposition. Their 
primary significance is a monetary one. The value of any stock 
of wealth is signified in money, the cost of its production, the 
utility of its consumption, are registered in monetary terms. 
The psychological researches which take place into processes of 
thought and desire are not regarded as having significance on 
their own account, but merely as means or instruments in the 
working of industrial processes. The study of motives, interests, 
and ideas in the process of invention, or in the organisation and 
operation of some productive work, treats these thoughts and 
feelings not in their full bearing upon human life, its progress or 



8 WORK AND WEALTH 

happiness, but in exclusive relation to the monetary end to which 
they are directed. 

§ 4. It is no concern of ours to criticise this attitude in the 
sense of condemnation. But it is important to realise that no 
progress of psychological analysis will enable economic science to 
supply a human valuation of industry so long as all the human 
functions involved in economic processes are measured, assessed, 
and valued, according to their bearing upon the production of a 
'wealth' which has no directly assignable relation to human 
welfare, but is estimated by a purely monetary measure. The 
net effect of this conception of the economic system as an elab- 
orate arrangement of material and spiritual factors, contributing 
to the production and distribution of a stream of various goods 
valued by a monetary standard, is to leave upon the mind the 
impress of a distinctively mechanical apparatus. No one, for 
example, can read the masterly work of Mr. Wicksteed ^ without 
recognising that his delicate, elaborate measurements and bal- 
ances of motives and preferences, while involving and implying 
actions that no one but man can perform, treat not only industry, 
but humanity itself as a psychological mechanism. 

This distinctively mechanical character is inherent in the struc- 
ture of an economic science based upon the subserviency of all 
human activities to a purely quantitative conception of wealth, 
and a purely monetary standard of value. This character of 
economic science is, of course, by no means disabling for all pur- 
poses. On the contrary, it furnishes valid instruments for the 
interpretation of many important groups of phenomena in the 
business world, and for the solution of certain problems where 
purely quantitative standards and methods are applicable. 
Indeed, the increasing devotion of economists to problems of 
money, price, and other definitely monetary questions, may be 
taken as a half-instinctive recognition of the real inadequacy 
of current economics for any very useful solution of those more 
vital problems into which closely human considerations enter as 
governing factors. As we proceed, we shall realise in more detail 
the nature of the incapacity of current economics to furnish any 
rules for settling issues that relate to wages, hours of labour, 
^ The Common-sense of Political Economy. 



THE HUMAN STANDARD OF VALUE 9 

State interference with private industry, private property, and 
other human problems which are in first appearance 'economic' 

Three defects appear, then, to disquahfy current economic 
science for the work of human valuation. First, an exaggerated 
stress upon production, reflected in the terminology and method 
of the science, with a corresponding neglect of consumption. 
Secondly, a standard of values which has no consistent relation 
to human welfare. Thirdly, a mechanical conception of the 
economic system, due to the treatment of every human action as 
a means to the production of non-humanly valued wealth. 

§ 5. These warning-posts may help us to discover and to formu- 
late an intellectual procedure more suited to our needs. A human 
valuation of industry will give equal attention to Production and 
Consumption, will express Cost and UtiUty in terms of human 
effort and satisfaction, and will substitute for the monetary 
standard of wealth a standard of human well-being. This asser- 
tion of vital value as the standard and criterion is, of course, no 
novelty. It has underlain all the more comprehensive criticisms 
of orthodox political economy by moraUsts and social reformers. 
By far the most brilliant and effective of these criticisms, that 
of John Ruskin, was expressly formulated in terms of vital value. 
The defects which he found in the current economic science were 
substantially the same as those which we have noted. His famous 
declaration that 'There is no wealth but life,' and his insistence 
that all concrete wealth or money income must be estimated in 
relation to the vital cost of its production and the vital utility of 
its consumption, is the evidently accurate standpoint for a human 
valuation of industry. This vital criterion he brought to bear 
with great skill, alike upon the processes of production and con- 
sumption, disclosing the immense discrepancies between mone- 
tary costs and human costs, monetary wealth and vital wealth. 
No one ever had a more vivid and comprehensive view of the 
essentially organic nature of the harmony of various productive 
activities needed for a wholesome hfe, and of the related harmony 
of uses and satisfactions on the consumptive side. His mind 
seized with incomparable force of vision the cardinal truth of 
human economics, viz. that every piece of concrete wealth must 
be valued in terms of the vital costs of its production and the 



lo WORK AND WEALTH 

vital uses of its consumption, and his most effective assault upon 
current economic theory was based upon its complete inadequacy 
to afford such information. But, though most of his later writings 
were suffused with this conception of wealth and with the double 
process of analysis which it involved, nowhere was that analysis 
systematically apphed. There were brilliant excursions into the 
domain of labour, distinguishing the nobler and the baser sorts, 
those which are truly 'recreative' and those which degrade and 
impoverish life. There was the famous distinction between 
'wealth' and 'illth,' according to the essential qualities of the 
goods and the sorts of persons into whose hands they pass for 
consumption. In the most systematic of his works, Munera 
Pulveris, he, indeed, appears at the outset to have his mind 
closely set upon the exact performance of the required analysis. 
For, defining the scope of his work, he says, 'The essential work 
of the pohtical economist is to determine what are in reahty use- 
ful or life-giving things, and by what degrees and kind of labour 
they are attainable and distributable.' ^ Then follows a clear 
and logical distinction between value and cost. 'Value is the 
life-giving power of anything; cost the quantity of labour re- 
quired to produce it.' Had he proceeded to estimate 'Wealth' 
with equal regard to its value and its labour-cost, the latter ex- 
pressed in vital terms, the scientific character of his analysis 
would have been preserved. But unfortunately he allowed him- 
self to be overweighted by a sense of value which stresses ' human 
utility' of consumption, so that, while the 'utiHty' side of the 
equation is worked out with admirable skill, the 'cost' or labour 
side is shghted, and the organic relation between the two is lost 
sight of. The confusion wrought in the minds of readers by the 
failure to find in any of his works a full application of his prin- 
ciple has been responsible for an unjust disparagement of the 
truly scientific service rendered by Ruskin towards the founda- 
tion of social-economics. From a Pisgah height his mind's eye 
swept in quick penetrative glances over the promised land, but 
he did not occupy it, or furnish any clear survey. 

§ 6. Our purpose here is in part to perform the task indicated 
by Ruskin, viz. to apply to industry the vital standard of valua- 

^ Munera Pulveris, § XL. 



THE HUMAN STANDARD OF VALUE ii 

tion, or at any rate to improve the instruments of vital survey. 
But only, in part. For our task is in scope less comprehensive 
than that to which Ruskin applied himself. Though his teaching 
sprang originally from two related roots of emotional valuation 
distinctively economic in their bearings, the love of the finer sorts 
of human work called Art, and the reprobation of the degrading 
conditions of the work most of his countrymen were called upon 
to do, it expanded into a wider meaning of 'economy' which 
included not merely economic activities and economic goods, but 
all sorts of vital activities and goods. A criticism of current 
Political Economy, on the ground that it did not treat its ac- 
cepted subject-matter in a vital manner, thus developed into a 
constructive Political Economy which not merely humanised the 
method but expanded the area of the science and art, so as to 
make it in effect a comprehensive science and art of human wel- 
fare. 

Now it has always been an open question whether the makers 
of PoKtical Economy were intellectually justified in severing 
marketable from non-marketable goods and services, and framing 
a separate science upon studies of the former. That marketable 
goods are not always separable from non-marketable, and that 
the economic activities of man are always inter-related with 
non-economic activities, are accepted truths. Ruskin's percep- 
tion of the intimacy of these relations between commercial and 
non-commercial functions and products led him to break down 
the barriers set up by Economic Science, in the furtherance of 
an art which should set up as its goal 'the multiplication of 
human life at its highest standard.* 

Now this enlargement may be quite legitimate. But it was 
evidently responsible in large measure for the failure of Ruskin 
to drive home the criticism directed against the current economic 
teaching. It was one thing to attack Political Economists for 
failing to take due account of human values in their treatment of 
processes relating to marketable wealth. It was, however, quite 
another to insist that the barrier between Political Economy and 
other social sciences and arts should be torn down, and that all 
phenomena of vital import should become the objects of its study. 
Had Ruskin been able to keep to the narrower scope, doubtless 



12 WORK AND WEALTH 

he would not have been Ruskin, but his attack on current ec- 
onomic theory and practice would have been vastly more effect- 
ive. 

This brief excursion into Ruskin's work has been necessary, 
first in order to make proper acknowledgement of the sound 
scientific instinct of this great pioneer of social thought, and, 
secondly, to make it clear that, while accepting his standard of 
valuation, we do not propose applying it outside the range of 
economic phenomena in the ordinary acceptation of that term. 
While admitting the overlapping and interaction of economic and 
other human functions, we shall accept the ordinary definition of 
the boundaries of economic studies, and shall seek to make our 
human survey and apply our human valuation within these 
limits. The extra-economic implications which the unity of hfe 
will disclose cannot, indeed, be ignored, but they will be treated 
as supplementary to the main purpose, that of valuing the proc- 
esses directly connected with the getting and spending of money 
incomes. 

§ 7. In setting up a vital standard of valuation, we are likely 
to be met with the objections that life is too vague, too changing, 
too incomprehensible for any standard, and that life is not 
valuable in itself but because of certain qualities which it may 
possess. Our standard must be conceived in terms of a life that 
is good or desirable. This consideration might evidently lead 
us far afield. If we are to undertake a valuation of life as a pre- 
liminary to valuing industry, it is likely that we may never 
approach the second undertaking. The best escape from this 
predicament is to start from some generally accepted concept 
which indicates, even if it does not express fully, the desirable in 
life. Such a term I take to be 'organic welfare.' Though in form 
a mere synonym for good life, it is by usage both more restricted 
and more precise. It perhaps appears to thrust into the forefront 
of consideration the physical basis of life. But the organic con- 
cept, when liberally interpreted and applied, carries no such 
restrictive implication, and its distinctively biological association 
should not rule it out from the work of wider valuation here 
required. As a provisional statement of our standard of valua- 
tion, 'organic welfare' has two advantages. In the first place, 



THE HUMAN STANDARD OF VALUE 13 

it supplies an admittedly sound method of estimating those 
physical costs and utilities with which the major part of industry 
and of its product is associated. Even in the most advanced 
civilisation of to-day, economic processes are primarily physical 
in the efforts they evoke and in the needs they satisfy; the ex- 
penditure and recoupment of physical energy constitute the first 
and most prominent aspect of industry. In tracing the origins 
of human industry, we shall find this rooted in what appear as 
half -instinctive animal functions for the satisfaction of 'organic' 
needs, individual or racial. The primitive direction of produc- 
tive effort is evidently 'organic' 

Again, the 'organic' point of view avoids two grave errors 
common to the more mechanical treatment of an economic 
science which has subordinated man to commercial wealth. It 
insists upon regarding the productive effort which goes into any 
work of production and the satisfaction which proceeds from the 
consumption of any product, not as a separate cost and a separate 
utihty, but in their total bearing upon the life of the producer or 
consumer. The mechanical separatism of the ordinary economic 
view follows from a treatment in which the labour bestowed on a 
product is only a 'cost' in the same sense as the raw materials 
and tools employed in making it, all ahke purchased as separate 
commodities at a market in which they figure as fractions of a 
Supply. Similarly with the ordinary economic treatment of con- 
sumption. Each consumable is regarded as yielding a quality of 
utility or satisfaction valued on its own account, whereas in real- 
ity its consumable value depends upon the ways in which it affects 
the entire organic process of consumption. Every speeding-up 
of a machine-process, or every reduction of the hours of labour, 
affects for good or evil both the economic and the human effi- 
ciency of the whole man: every rise or fall of remuneration for 
his labour similarly reacts upon the standard of life. Nor is this 
all. Current economic science has not only treated each cost and 
each utility as a separate item or unit of economic power, it has 
treated each man as two men, producer and consumer. The 
acquiescence in the economic tendency towards a constantly in- 
creasing specialisation of man as producer, a constantly increasing 
generalisation of man as consumer, is only intelligible upon the 



14 WORK AND WEALTH 

supposition that the arts of production and consumption have 
no relation to one another.^ The standpoint of organic welfare 
reduces to its natural limits this useful distinction of producer 
and consumer, and enables us to trace the true interactions of the 
two processes. In a word, it obliges us to value every act of pro- 
duction or consumption with regard to its aggregate effect upon 
the life and character of the agent. 

§ 8. Finally, a 'social' interpretation of industry is not pos- 
sible except by treating society as an organic structure. Whether 
society be regarded as an 'organism' with a Hfe conceived as 
comprising and regulating the life of its individuals, in the same 
manner as a biological organism that of its cells, or as an 'organi- 
sation' contrived by individuals entirely for the furtherance of 
their private ends, it must be treated as a vital structure capable 
of working well or working ill. I say vital structure, not spiritual 
structure, for I hold the tendency to interpret social organisation 
exclusively in terms of ethical ends, and as existing simply for 
'the reahsation of an ethical order,' to be unwarranted. The 
men who form or constitute a Society, or who enter any sort of 
social organisation, enter body and soul, they carry into it the 
inseparable character of the organic hfe, with all the physical and 
spiritual activities and purposes it contains. Particular modes 
of social organisation, as, for example, a Church, may be treated 
as directed primarily to spiritual ends, though even there the 
separation is not finally vahd. But society in the broader sense, 
even though conceived not as an 'organism' but merely as an 
organisation, must be regarded as existing for various sorts of 
human purposes. For the impulses to form societies are rooted 
in broad instincts of gregariousness and of sexual and racial 
feeling, which are best described as organic, and, though these 
instincts become spiritualised and rationalised with the progress 
of the human mind, they never cease to carry a biological import. 

Even though one takes, therefore, the extremely individualistic 
view of Society, regarding it as nothing more than a set of arrange- 
ments for furthering the life of individual men and women, 

^ How potent a source of intellectual confusion this separation of producer and 
consumer is, may be best illustrated from the commonly accepted treatment of the 
theory of taxation, which regards 'consumers' as a different class of beings from 
'producers' for purposes of incidence of taxes. 



THE HUMAN STANDARD OF VALUE 15 

entirely a means or instrument for achieving the ends of 'per- 
sonahty/ our human valuation of industry will require considera- 
tion of its reactions upon the structure and working of these 
social arrangements. 

But this organic treatment of Society is, of course, still more 
essential, if we consider society not merely as a number of men 
and women with social instincts and social aspects of their in- 
dividual lives, but as a group-life with a collective body, a 
collective consciousness and will, and capable of realising a 
collective vital end. The disposition to convert sociology into 
a study, on the one hand, of social feelings in the individual man, 
on the other of social institutions that are only forms through 
which these feelings express themselves, is to my mind a wholly 
inadequate conception of the science of Society. The study of 
the social value of individual men no more constitutes sociology 
than the study of cell life constitutes human physiology. A 
recognition of the independent value of the good Hfe of a society 
is essential to any science or art of Society. 

To a Greek or a Roman, the idea that the city existed merely 
for the production of good citizens, and without an end or self 
of its own, would never have seemed plausible. Nor to any 
Christian, familiar with the idea and the sentiment of the Church 
as a society of religious men and women, v/ould it occur that such 
Society had no life or purpose other than that contained in its 
individual members. Society must then be conceived, not as a 
set of social relations, but as a collective organism, with life, will, 
purpose, meaning of its own, as distinguished from the life, will, 
purpose, meaning, of the individual members of it. To those who 
boggle at the extension of the biological term 'organism' to 
society, asking awkward questions as to the whereabouts of the 
social sensorium, and the integument of a society, or whether a 
political, a religious, an industrial Society do not conflict and 
overlap, I would reply that these difficulties are such as arise 
whenever an extension of boundaries occurs in the intellectual 
world. The concept ' organism ' as applied to the Hfe of animals 
and vegetables, is not wholly appropriate to describe the life of a 
society, but it is more appropriate than any other concept, and 
some concept must be applied. If some quahfication is desired. 



i6 WORK AND WEALTH 

no objection can be raised against the term super-organism ex- 
cept its length. What is necessary is that some term should be 
used to assist the mind in realising clearly that all life proceeds 
by the cooperation of units working, not each for its separate 
self, but for a whole, and attaining their separate well-being in. 
the proper functioning of that whole. As the structure of the 
organic cell, the organ, and the organism illustrate this coopera- 
tive and composite Hfe, so with the larger groupings which v/e 
call societies. An animal organism is a society of cells. 

§ 9. So far as the difEculty arising from the narrowly biological 
use of the term organism is concerned, that is rapidly disappear- 
ing before the advance of psychology. For modern biology is 
coming more and more to reahse its early error in seeking to con- 
fine itself to the study of life as a merely physical phenomenon. 
Biology and psychology are constantly drawing into closer rela- 
tions, with the result that a new science of psycho-biology is 
already coming into being. In building, thus far, upon a founda- 
tion of organic concepts, one is no longer properly exposed to the 
suspicion of ignoring or disparaging the psychical phenom.ena 
which constitute man's spiritual nature. 

As biology, thus treating the entire organic nature of man, 
becomes an individual psycho-physics, so must sociology, treating 
the wider organic nature of man, become a collective psycho- 
physics. While then the respective importance of the welfare 
of the individual and of society may still be difficult to define, 
the admission of society as a psycho-physical structure, with 
human ends of its own, will involve its proper recognition in the 
appraisement of every sort of human value. Our task, that of 
devising a method of valuation of industry, will evidently demand 
that economic processes shall be considered, not only in their 
bearing upon individual lives, but in their bearing upon the wel- 
fare of society. Indeed, it is difficult to see how any reasonable 
person can confront the grave practical problems presented by the 
industrial societies of to-day, such as those contained in individ- 
ual, class, sex, national differentiation of economic functions, 
without reahsing that the hypothesis of humanity as itself a 
collective organism can alone furnish any hope of their rational 
solution. 



THE HUMAN STANDARD OF VALUE 17 

The significance of the organic conception in any human 
valuation of industrial acts or products is evident. It requires 
us to value each act or product both from the standpoint of the 
individual and of the society to which he belongs, and it fur- 
nishes a harmony of the two areas of interest. The baffling 
problems everywhere presented to thought by the apparent 
contradiction of the unity and the diversity of nature, the whole 
and the parts, the general and the particular, find their clearest 
practical solution in the fact and consciousness of man's social na- 
ture, his recognition that in feeling and in action he is both an 
individual and a member of a number of social groups, expanding 
in a series of concentric circles from family and city to humanity, 
and in dimmer outline to some larger cosmic organism. 

For our economic valuation, the harmony of this narrower 
and wider treatment of human nature is of profound and obvious 
importance. It will require us, in considering the vital costs and 
satisfactions involved in the production and consumption of 
goods, to have regard to their effects, not only upon the individ- 
uals who produce and consume the goods, but upon the city, 
nation, or other society to which they belong. Human welfare 
will be not merely the welfare of human beings taken as an ag- 
gregate, but of society rega'rded as an organic unity. The most 
delicate economic and spiritual issues of adjustment will be found 
to relate to the provisions for harmonising the order and the 
growth of the narrower and the wider organisms. While, then, 
biology has in the past been too arrogant in pressing distinctively 
physical implications of the term 'organism' into the dawning 
science of sociology, and in distorting the true conception of social 
evolution by enforcing narrow interpretations of selection and 
survival, this is no ground for refusing to utilise the terminology 
which, better than any other, expresses the relations of parts to 
wholes in every sort of living substance. 

The contradictions of Production and Consumption, Cost and 
Utility, Physical and Spiritual Welfare, Individual and Social 
Welfare, all find their likeliest mode of reconcilement and of 
harmony in the treatment of society as an organism. 

Note. There are doubtless those who will remain dissatisfied with this insistence 
upon the extension of organism and the conception of the humanly desirable in 



1 8 WORK AND WEALTH 

terms of 'organic' welfare. They would insist that the conscious personality of an 
individual or of a society transcends organism, as the latter does mechanism, and 
that our standard and measure of welfare should be expressed in psychical terms of 
personality. This point of view has recently been concisely and powerfully restated 
by Dr. Haldane {Mechanism, Life mid Personality). But though there is much 
to say for treating personality as the intrinsic quality of our humanist standard, 
I decided against the course on a balance of intellectual expediency, preferring to 
retain the clearness and force of the organic concept while spiritualising it to 
meet the requirements of ascending life. 



CHAPTER II 

THE HUMAN ORIGINS OF INDUSTRY 

§ I. Although it is no part of my purpose to endeavour to set 
forth the facts and laws of the historical evolution of modern 
industry, it will be useful to make some brief allusion to the ori- 
gins of industry and property, so as to give concrete meaning 
to the stress laid upon organic processes in our interpretation. 
For just in proportion as it is realised that industry has all its 
earliest roots in the primary organic needs of man, will assent 
more easily be given to the proposal to adhere to the organic 
conception of welfare in valuing modern economic processes. 

It is not easy to ascertain where the activities which we term 
industrial first emerge in the evolution of organic life. Every 
organism selects, appropriates, and assimilates matter from its 
environment, in order to provide for growth or waste of tissue 
and energy given out in the general course of its vital processes, 
including the activities of procuring food, protection against 
organic or inorganic dangers, and the generation, rearing, and 
protection of offspring. Nutrition and function are the terms 
usually applied to describe the primary balance of the vital 
processes of intaking and outputting energy. The organism 
feeds itself in order to work. It seems at first as if we had here 
laid down in the origins of organic life a natural economy of 
production and consumption. But do the organic processes of 
feeding, choosing, appropriating, and assimilating food, constitute 
consumption, and do the other activities for which food is utilised 
constitute production? Reflection will show that there is very 
little intellectual service in pressing sharply this distinction. 
The active life of an organism consists in a round of nutritive, 
protective, generative processes, each of which, from the stand- 
point of individual and species, may be regarded alike as produc- 
tive and consumptive. A plant drives its suckers into the soil in 
search of the foods it needs, disposes its leaves to utilise the Hght 

19 



20 WORK AND WEALTH 

and air or for protection against the wind, assimilates its organic 
food by the use of its stock of chlorophyl, distributes it through- 
out its system for maintenance and growth, and directs that 
growth so as to safeguard its own existence and to provide itself 
with favourable opportunities of fertilisation by insect or other 
agencies. If due account be taken both of the cellular life within 
the individual and of the specific hfe of this plant organism, the 
whole of the processes or activities appears to be nutritive, each 
act of nutrition being associated with some other function in the 
evolution of the cell, the organism, the species. It would be as 
plausible to assert that every other function, protective, genera- 
tive, or other, was undertaken for the nutrition of the individual 
or the species, as to assert the opposite. But, without entering 
into the delicate metaphysics of this question, we may confidently 
affirm that in this elementary organic life nutrition and function 
cannot be regarded as mutually exclusive processes, while the eco- 
nomic contrasts of production and consumption, work and enjoy- 
ment, cost and utility, have no clear application. If we approach 
a stage nearer to human life, we begin to find, in the life of either 
the lower or higher animals, some organic activities to which the 
term industry appears applicable. The long, arduous, complex 
and painful output of energy, consciously put forth by many ani- 
mals in the search for food, sometimes in the storage of food, in 
the provision of shelter, in some instances in the use of tools or 
weapons, in processes of cooperation and division of labour for 
migration, protection, or combat, certainly approaches what we 
recognise as industry. It involves a painstaking interference 
with the materia environment for the purposive attainment of 
some distinct object consciously regarded as desirable, which is 
of the essence of industry. It may, however, be objected that 
such processes, though resembhng human industry in the in- 
tricacy and technical skill involved, are not really purposive in 
the rational sense, but are merely instinctive, and that, as such, 
they ought to be distinguished from the rational conduct of 
human industry. Thus, it is contended that, though the efforts 
given out by many animals in procuring food, protection against 
enemies, or provision of shelter, formally correspond with familiar 
processes of human industry, the direction of instinct makes 



THE HUMAN ORIGINS OF INDUSTRY 21 

the application of this term improper. But, as we proceed further 
into our psychological analysis of human work, we shall find so 
large an element of admitted instinct in many forms of it as to 
preclude us from admitting that 'rational' direction is essential 
to industry. It is, therefore, permissible for us to give a provi- 
sional recognition to such animal activities as containing some, 
at any rate, of the essential characteristics of 'work' or 'industry.' 
Indeed, the evident resemblance of these regular activities of 
animals in seeking food, shelter and protection, to the activities 
of primitive man applied to the same definitely organic satisfac- 
tions, would preclude us from denying to the lower animals what 
we must admit in the case of men. For, even in primitive men, 
possessing a certain use of tools and weapons, and a higher degree 
of cunning in dealing with their environment, the drive and 
direction of organic instincts and impulses, as distinguished 
from reflection and reason, appear to be hardly less dominant 
than in their animal kindred. Unless we arbitrarily reserve the 
concepts work and industry for a higher stage of social evolution, 
in which some measure of settled life with tribal and personal 
property and calculated provision for future wants have emerged, 
it will be well to seek the roots of the elaborated industrial system 
which we wish to interpret in these rudimentary and mainly 
instinctive activities of animals and savage men. 

§ 2. In examining these organic activities lying at the basis 
of human industry, we shall light at the outset upon one fact 
of extreme significance, viz. that to each of these organically 
useful efforts Nature has attached some definite physical, or 
psycho-physical, enjoyment. Hunting, fighting, mating, the care 
and protection of the young, indeed all actions which possess 
what is called 'survival value' or biological utility, are endowed 
with a pleasure bonus as a bribe for their performance. Nature 
endows most organically useful efforts with concurrent enjoy- 
ment. 

But, though in these 'organic functions' many animals give 
out a great deal of 'laborious' effort, commingled with elements 
of play or of incipient art, as in the dancing, singing and decora- 
tive operations of birds, to none of them is the word 'industry' 
fully applicable. We do not seem to enter the definitely economic 



22 WORK AND WEALTH 

sphere until we find animals sufficiently reasonable to interfere 
in a conscious way with their environment, for tolerably distant 
ends. For, though much industrial production and consumption 
will continue to be either instinctive or automatic in their 
operation, a growing element of conscious purpose will become 
essential to the ordered conduct of all industrial processes. The 
conscious conception of more distant ends and the growing 
willingness to make present sacrifices for their attainment are 
the plainest badges of this industrial progress. When a being is 
aware of these purposes he has entered a rational economy. 

As this more rational economy proceeds, the marks which 
distinguish it from a purely instinctive organic economy become 
evident. The instinctive economy allows Httle scope for in- 
dividuahty of life, the dominant drive of its 'imphcit' purpose 
is specific, i. e. subserving the maintenance and evolution of the 
species. The spirit of the hive in bee-Hfe is the fullest expression 
of this subservience of the individual fife to the corporate life 
and of the present generation to the series of generations consti- 
tuting the specific fife. But everywhere the dominion of instinct 
implies the absorption of the individual fife in promoting the ends 
of the species : successful parenthood is the primary work of the 
individual. 

It might almost be said that the dawn of reason is the dawn 
of selfishness. For rational economy involves a conscious realisa- 
tion of the individual self, with ends of its own to be secured and 
with opportunities for securing them. The earliest conception 
of this separate self and its ends will naturally tend to be in 
terms of merely or mainly physical satisfaction. Thus the dis- 
placement of the instinctive by the rational economy is evidently 
a critical era, attended with grave risks due to the tendency 
towards an over-assertion of the individual self and a consequent 
weakening of the forces making for specific life. Man, the newly 
conscious individual, may perversely choose to squander organic 
resources 'intended' by nature for the race upon his own personal 
pleasures and needs. Fie may refuse to make as a matter of 
rational choice those personal efforts and sacrifices for family and 
race which no animal, subject to the drive of instinct, is able to 
'think' of refusing. Such may be an effect of the release from 



THE HUMAN ORIGINS OF INDUSTRY 23 

the life of organic instincts. The increasing supply of foods and 
other sources of physical satisfaction he may apply to build up 
for himself a life of super-brutal hedonism.^ For, when reason 
first begins to assert supremacy, it is apt to become thrall to the 
purely animal self. Only as this animal self becomes spiritualised 
and socialised, does the social race-Hfe reassert its sway upon the 
higher plane of human consciousness. 

§ 3. But it is of importance to reahse that a first effect of 
reason, operating to direct the purposive activities, is to liberate 
the 'self from the dominion of the specific life, and to enable it 
to seek and obtain separate personal satisfactions. For with 
this power comes the fact and the sense of 'personal property' 
which play so large a part in industry. 

Early industry and early property are largely directed by the 
requirements of this dawning sense of personality. Though the 
origins of industry are doubtless found in the promptings of 
organic utiUty, they are not of a narrowly 'utilitarian' character. 
We do not find the earliest industries of man closely confined to 
the satisfaction of what might seem the most urgent of his organic 
needs, food, shelter, protection against enemies. The elements 
of play and ornament are so prevalent in early industries as to 
suggest the theory, which some anthropologists press far, that 
adornment for personal glory is the dominant origin of industry 
and property. So, for example, Biicher ^ contends that the 
earliest really industrial activities were a painting and tatooing 
of the body, and a manufacture of clothing and of other personal 
apparatus for purely ornamental purposes. 

Even the taming of domestic animals was, he held, first under- 
taken for amusement or for the worship of the gods. The strong 
attraction of most savage or backward peoples in our day towards 
articles of ornament and play which afford expression to naive 
personal pride, appears to support this view. Primitive man cer- 
tainly does not evolve towards industrial civilisation by a logi- 

^ 'Ein wenig besser wiird er leben 

Hattst du ihm nicht den Schein des Himmels Licht gegeben 
Er nennt's Vernunft und braucht's allein 
Nur thierischer als jedes Thier zu sein.' 

^ Industrial Evolution (Bell & Co.)- 



24 WORK AND WEALTH 

cally sane economy of satisfying first his most vitally important 
material needs, and then building on this foundation a superstruc- 
ture of conveniences, comforts and luxuries, with the various in- 
dustries appertaining thereto. This economic man is nowhere 
found. Actual man, as many anthropologists depict him, appears 
to begin with the luxuries and dispenses with the conveniences. 
This non-utihtarian view of the origins of industry has, how- 
ever, been driven to excess. There remains a large element of 
truth in the proverb * Necessity is the mother of invention.' 
The earliest weapons and tools, adapted from sticks and stones 
and other raw material, were probably forced on the dawning 
intelligence of man by the hard facts of his struggle with hostile 
nature and his search for food. Fighting, hunting, mating, were 
presumably his first pursuits and the early arts or industries, at 
any rate on the male side, would be subsidiary to these pursuits. 
Any organised process or handling of m.atter which would make 
him a better fighter, hunter, suitor, would be likely to emerge as 
a craft or industry. This explains the apparent blend of utili- 
tarian and non-utilitarian origins. In point of fact, most of the 
so-called ornamental activities and products have their evident 
biological uses. They are not mere playthings. The adornment 
of the human body, the use of tatoos and masks, drums and gongs 
and other play-products, are partly, no doubt, for mere glory of 
self-assertion, itself an instinctive craving, but also for courtship, 
for recognition and for frightening enemies. While, then, it re- 
mains true that the sportive and artistic impulses are conspicuous 
in the early crafts, it is a mistake to disparage the organic utiHty 
of these processes. After man has made provision for the present 
necessities of the body, his superfluous energy naturally tends, 
either to preparatory play, the practice or imitation of biologically 
useful actions, or else to explorative, constructive, and decorative 
work in handling such materials as present themselves. This 
curiosity about his surroundings, and the instinctive desire to 
construct and arrange them for his convenience, or for the dawn- 
ing aesthetic satisfaction of his senses, or to impress the female 
of his race, these instincts undeniably coalesce with the drive of 
physical necessity to force man to apply his mind to the discovery 
and practice of the early arts and crafts. 



THE HUMAN ORIGINS OF INDUSTRY 25 

But, though these distinctively male modes of manipulating 
the environment thus possess a utilitarian aspect, they do not 
furnish the beginnings of the chief industries which figure in 
civilised life. The beginnings of manufacture and of agriculture, 
as regular occupations, are commonly ascribed to women and to 
slaves. Those who conceive of the earnest human societies as 
matriarchal or gynaecocentric, the women forming fixed centres 
of order in the home and village, owning the children and the 
property attached to the home, regard women both as the inven- 
tors and the practitioners of the early handicrafts, including the 
cultivation of the soil. The beginnings of the arts of pottery, 
basket-making, building, clothes-making, as well as digging, plant- 
ing, milling and other processes of preparing food, were doubt- 
less women's work in the first instance, though they were proba- 
bly raised to the position of regular industries when slavery be- 
came common. It is, however, noteworthy that, even in those 
early handicrafts devoted to the most practical needs of Kfe, the 
decorative instinct generally finds expression. Not only the 
weapons of the men, but the pots and pans and other domestic 
utensils of the women, carry carvings or mouldings, which testify 
to the play or art impulses. Leisure and pleasure thus appear as 
ingredients in the earliest industries. 

To whatever source, then, we trace the origins of industry, to 
the use of weapons, snares and other male apparatus for the fight 
and hunt, to the instincts of play, imitation and adornment as 
modes of self-expression and of pride, or to the more distinctively 
utiHtarian work of women and of slaves around the home, we 
find play or pleasure mingled with the work. 

This profoundly interesting truth is attested by the long sur- 
viving presence of the song and other rhythmic activities in 
many forms of associated labour, as well as in the dancing which 
in primitive societies was an almost invariable accompaniment 
of all important enterprises, war, hunting and harvesting, and 
which still survives among us in the Harvest Home. Though 
in slave industries this Hghter element doubtless dwindled 
very low, it seldom died out entirely, as the song of the 
galley-rowers, or of the Southern negroes in the cotton-fields, 
testifies. Where the handicrafts throve among free men in 



26 WORK AND WEALTH 

Europe, everywhere the motives of play, personal pride and prow- 
ess, find liberal expression in industry. 

§ 4. This slight and necessarily speculative sketch of the origin 
of industry is designed to enforce two facts. In the first place, 
we can trace in every rudimentary industry the promptings of 
vital utihty, laying the foundations of an economy of efforts and 
satisfactions which furthers the organic development of the in- 
dividual and the race. In the second place, we everywhere find 
what we call distinctively economic motives and activities almost 
inextricably intertwined, or even fused, with other motives and 
activities, sportive, artistic, religious, social and political. 

To trace the history of the process by which in modern civiHsa- 
tion economic or industrial activities have separated themselves 
from other activities, assuming more and more dominance, until 
the Industrial System and the Business Man have become the 
most potent facts of life, would He beyond our scope. Nor is it 
at all necessary. What is important for us to reahse, however, 
is that this process of industrialisation, through which the civil- 
ised peoples have been passing, is beyond all question the most 
powerful instrument of education. It appears to have done more 
to rationalise and to sociahse men than all the higher and more 
spiritual institutions of man, so far as such comparisons are possi- 
ble. It has rationalised man chiefly by compelhng him to ex- 
ercise foresight and forethought, to subdue his will and train his 
active faculties to the performance of long and intrinsically dis- 
agreeable tasks, in order to reahse some more and more distant 
object of desire, and by obliging him to recognise the rigorous 
laws of causation in his calculations. It has socialised him by 
weaving an ever more elaborate tissue of common interests be- 
tween him and a growing number of his fellow men, and by 
compelling him to engage in closer cooperation with them for the 
attainment of his ends. Though this sociaHsation is far more ad- 
vanced in objective fact than in thought and feehng, it remains 
true that the direct and indirect association of larger and more 
various bodies or men in modern industry and commerce is the 
first condition and the strongest stimulus to the expansion and 
intensification of the social will. 

It is this orderly rational system of industry, employing, as it 



THE HUMAN ORIGINS OF INDUSTRY 27 

does, the organic powers of man for the satisfaction of his organic 
needs, that we seek to submit to valuation. 

The immense variety and complexity of the arts and crafts of 
which such a system of human industry consists, the long inter- 
val of time which often intervenes between acts of production and 
of consumption, the differences of personality between those who 
perform the efforts of production and those who utilise or enjoy 
the fruits of those efforts in consumption, immensely remote as 
they appear from the simple organic economy of primitive man, 
do not escape an ultimate dependence upon organic laws and con- 
ditions. A human valuation, therefore, must insist upon express- 
ing them in terms of organic welfare, individual and social. As 
human activities and enjoyments ascend in the process we term 
civihsation, we shall expect to find this organic life becomdng 
more psychical, in the sense that their modes are more 'reason- 
able' and the emotions that attach to them are more spiritual, 
i. e. less directly driven by animal instincts. So too we shall ex- 
pect industrial progress to contribute to a growing adjustment 
between the individual and the social economy, restoring under 
the form of reasonable social service to the more highly individ- 
ualised members of a modern society an increasing measure of 
that subservience to the organic welfare of mankind which in- 
stinct was able to secure upon a lower plane of conscious life. 



CHAPTER III 

REAL income: COST AND UTILITY 

§ I. Approaching on its concrete side the economic system the 
human values of which we seek to ascertain, we find it to consist 
in a series of productive processes bringing various goods and 
services into marketable shape, accompanied by a series of con- 
sumptive processes in which these goods and services are used, 
wasted, or otherwise disposed of by those who buy them for per- 
sonal uses. The former set of processes, as we have recognised, 
occupy a place of so much greater prominence and publicity as 
virtually to absorb the science of industry or 'economies', leaving 
to the processes of consumption an obscure and entirely subor- 
dinate position. Our organic or human valuation starts with a 
protest against this assumption of inequaHty in the arts of pro- 
duction and consumption. Its interpretation of economic pro- 
cesses will be disposed to lay as much stress upon the history of 
the various commodities after they leave the shop-counter and 
pass into the possession of consumers as before. The human 
good and evil associated with economic 'wealth' must, \dewed 
from the organic standpoint, depend as much upon the nature 
of its consumption as upon the nature of its production. 

This consideration will determine our method of applying the 
human standard of values. Accepting at the outset the conven- 
ient distinction between the processes of production and con- 
sumption, we shall approach the economic system at the point 
where the two processes meet, that is to say where wealth emerges 
from the productive processes as Income, in order to pass as such 
into the possession of persons entitled to consume it. 

To make the enquiry simpler and more easily intelligible, we 
will ignore for the present all the extra-national or cosmopolitan 
conditions of modern industry, and assume that we are dealing 
with a closed national system producing, distributing, and con- 
suming the two thousand million pounds' worth of goods and 

28 



REAL INCOME: COST AND UTILITY 29 

services roughly estimated to constitute the current annual in- 
come of the British nation. 

§ 2. Now the habit of regarding wealth and income in terms of 
money is so deep-seated and persistent as to make it difficult for 
ordinary ' business ' men to realise these words in any other than 
a monetary sense. The ordinary mind has to break through a 
certain barrier of thought and feehng in order even to present 
to itself the significance of 'real' wages or 'real' income, as dis- 
tinguished from money wages and money income. This do- 
minion of the monetary standard is illustrated by the almost in- 
stinctive thrill of elation that is felt when we are informed that 
the income of the nation has risen from about £1,200,000,000 in 
I S 70 to £2,000,000,000 in 1912.^ So accustomed are we to regard 
money as the measure of the desirable, that we feel that this rise 
of money income must imply a corresponding rise in national 
welfare. It requires some effort of mind to realise even the two 
obviously important factors of the increase of population and the 
sliift of prices, which, when once realised, so evidently affect the 
bearing of the m^oney income upon the national welfare. Year 
after year trade reports and other official documents, in com- 
paring the relative economic position of the various nations or the 
fluctuations of trade within a single nation, habitually encourage 
this misleading influence of the financial standard by pubhshing 
crude, uncorrected monetary values as if they were indicative 
of industrial facts, and statesmen take such figures as vahd evi- 
dence on which to base a policy. 

As regards the particular object of our enquiry, this obsession 
of the general mind by the monetary standard makes it impossible 
for us even to assume that all our readers attach a clear and con- 
sistent meaning to the term 'real' income. It is not quite easy 
at first to grasp the central and essential fact that every receipt 

^ I have taken the estimate of the total income of the nation made by Mr. Fhix 
in his Reports of the First Census of Production for the United Kingdom {1907) 
as the basis for the round figures adopted here for aggregate income and for savings. 
As a matter of fact Mr. Flux assigns to savings a slightly higher figure and propor- 
tion of income than that taken here. But since for our purpose nothing depends 
upon the exactitude of the figures (and indeed Mr. Flux claims no such exactitude 
for his) it is more convenient for us to take the round figures of our text, though 
probably in both instances, i. e. aggregate income and savings, they are somewhat 
below the true figures for 191 2. 



30 WORK AND WEALTH 

of any sort of income, whether as wages, rent, salary, interest, 
profit, fees or otherwise, involves the coming into being of a bit 
of 'real' income in the shape of some material goods or some 
saleable service.^ This fact once grasped, however, it becomes 
evident that the £2,000,000,000, said to be the nation's income, 
is merely the monetary representative of goods and sen/ices which 
are the net product of the economic activity of the year, the 
quantity of wealth produced over and above that which has gone 
to maintain the existing material fabric of industry. The aggre- 
gate amount of 'wealth produced' is, of course, considerably 
greater, for a large quantity of the productive power must con- 
tinually be employed in repairing the wear and tear sustained 
by the material instruments of production, the land, buildings, 
machinery and tools and other forms of 'fixed' capital, and in 
replacing the raw materials and other forms of 'circulating' 
capital which have passed out of the productive processes into 
consumable goods. The net 'real' income consists of the goods 
and services produced over and above this provision for the 
maintenance of the material structure of the system. 

There is, however, an important qualification to this mode of 
reckoning the net real income of the nation which needs mention. 
While the portion of the current product which goes to replace 
this wear and tear of land and capital is not included in the goods 
and services represented by the £2,000,000,000 and classed as 
real net income, the wear and tear or maintenance fund of labour 
is included in it. When consideration is taken of the distribution 
of what is often termed the national dividend between the re- 
spective owners of the factors of production, this anomaly is 
seldom borne in mind. In estimating the income of labour the 
replacement fund is counted; in estimating the income of land 
and capital it is not counted. But, illogical as this discrimina- 

^ There is no commoner stumbling-block to the beginner in the study of Political 
Economy than the fact that the income of a rich man, amounting to say £10,000, 
when paid away to persons who sell him goods or personal services, seems to count 
'over again' as incomes of these persons. Why, they are disposed to ask, should 
the private secretary who receives £400 out of this £10,000 be required to pa}'' an 
income-tax upon a sum which (as they say) has already paid its share as part of 
the £10.000? Nothing but a grasp of the fact that the secretary produces a 'real' 
income of ' services ' corresponding to this £400 which he receives clears up the mis- 
understanding. 



REAL INCOME: COST AND UTILITY 31 

tion is, usage has so universally accepted it that it will be best 
for us in a work not chiefly concerned with the problems of objec- 
tive distribution to give a provisional acceptance to it. 

The real net income, or national dividend, corresponding to the 
£2,000,000,000, consists of the goods and services at the disposal 
of the recipients of this money income. By applying each sov- 
ereign as they received it in rent, wages, interest, profit, fees, 
etc., to purchase consumable goods or services, they might con- 
sume the whole of it during the current year. In that event, 
though provision would have been made for the bare upkeep of 
capital, no provision would have been made for its enlargement 
or improvement with a view to the future increase of production. 
In point of fact, that provision is made by applying a considera- 
ble portion of the net money income, say £300,000,000, to de- 
mand, not consumable goods or services, but more instruments 
and materials of production. As this process goes on continu- 
ously, it implies that some ^/ao of the total industrial activity 
of the nation is engaged in making not consumable but new capi- 
tal goods. -^ This saving process has an important psychology of 
its own to which we shall give some attention later on. At pres- 
ent it need only be considered as a reduction in the net income of 
consumable goods and services at the disposal of a progressive 
community for current use and enjoyment. This wealth, actually 
available for current use, the food, clothing, shelter and other 
domestic necessaries and conveniences, the travel, information, 
education, recreation, professional, oj6&cial and domestic services, 
the various sorts of material and non-material comforts and lux- 
uries, constituting the current net real income of consumer's 
goods, is the primary object of our valuation. The new machines, 
tools, buildings, materials and other forms of capital, expressing 
the £300,000,000 of savings, though entering our analysis upon 
the costs side equally with goods used for immediate consump- 
tion, do not figure directly on the consumption side, but only in- 
directly in the future consumables which they assist to produce. 

§ 3. But as regards the application of our analysis, it makes no 

^ About half of this passes under the head of over-seas investments into the in- 
dustrial systems of other nations, though the interest upon this foreign capital is 
available for consumption in this country. 



32 WORK AND WEALTH 

real difference whether we take the narrower connotation of the 
national dividend which includes only consumable goods, or the 
broader one which includes savings. It will no doubt easily be 
admitted that a merely pecuniary statement of the 'value' of 
this dividend conveys no reliable information as to the human or 
vital welfare it involves. Making due allowance for all tem- 
poral or local variations of price, the statement that the national 
income has doubled in the last century, or even that the income 
per head of the population has doubled, affords no positive proof 
that any increase has been made in the national welfare, much less 
how much increase. Unless, however, we adopt an attitude of 
general scepticism towards the economic structure of 'civilisa- 
tion,' we may admit, with Professor Pigou,^ a presumption that 
a growth of the national dividend faster than the growth of pop- 
ulation implies some increase of welfare. But even that presump- 
tion must be qualified by the reflection that it really rests upon a 
view of marketable wealth which has exclusive regard to its sup- 
posed utility in consumption without any corresponding consid- 
eration of the cost of its production. A pecuniary statement of 
the national dividend which contained no information as to the 
nature of the goods and services comprising it, may be repudiated 
out of hand as useless for our purpose. For upon such a state- 
ment £i 'worth' of 'trade gin' has precisely the same value as £i 
'worth' of 'best books' or of wholesome bread, £i worth of hand- 
made lace sweated out of peasant women at the cost of their 
eyesight has precisely the same weight in the money income of 
the nation as £i worth of carpentry or of medical attendance. 

§ 4. If we are to estimate the human value of a given national 
income, it is evident that we must secure answers to three ques- 
tions. We must first learn what the concrete goods and services 
are which constitute the 'real' income, and then we must trace 
these concrete goods and services backwards through the proc- 
esses of their production and forward through the processes of 
their consumption, in order to learn the human costs and utilities 
which attach to each. The amount of human wealth or 'illth' 
which each of these concrete ' goods ' contains has, strictly speak- 
ing, no assignable relation to the money ticket put upon it when 
^ Wealth and Welfare, Chap. I. 



REAL INCOME: COST AND UTILITY s3 

it is sold. That sum of human value can only be worked out in 
terms of the actual processes of production and consumption 
through which the 'goods' pass. Some students of current polit- 
ical economy may perhaps be disposed to cavil at this criticism, 
insisting that on the average things must be sold in proportion to 
the painful or otherwise distasteful efforts of producing them, or 
in proportion to the pleasant or otherwise serviceable modes of 
their consumption. On the average, they will contend, a rational 
calculus of pleasure and pain underHes the operations of the eco- 
nomic system. This position, however, I claim to undermine by 
showing, first that this 'rational' calculus rests upon assumptions 
of free choice and competition which are unwarrantable, and sec- 
ondly, that this rational calculus of current pleasures and pains, 
so far as it is operative, is not a valid criterion of human welfare 
as conceived in the terms of organic welfare. Our task, it must 
be realised, is not that of reducing monetary values, or the con- 
crete goods to which they refer, to terms of average current de- 
sirability, but to terms of that desirabihty corrected so as to con- 
form to the best-approved standard of the desirable. In a word, 
the defects of average current estimates and desires, in part 
causes, in part effects of a defective industrial economy, must 
themselves be valued and discounted in terms of our human ideals 
of individual and social Hfe. 

§ 5. With this organic standard, the nature and validity of 
which will become clearer with use, let us set about our task of 
finding methods for assessing in terms of human value the stocks 
of concrete goods and services which are the real net income of 
the nation. The human, as distinguished from the money and 
the ' real ' dividend, will consist of the amount of vital or organic 
welfare conveyed in the producing and consuming processes for 
which this concrete income stands. What we require then is to 
apply some sort of calculus of human cost and human utility to 
these processes. Now we are confronted at the outset by the po- 
sition of an economic science which conceives production entirely 
in terms of 'cost', consumption entirely in terms of 'utility'. 
Indeed, the economic doctrine of value hinges almost entirely 
upon this antithesis. For it is mainly owing to its 'costs' that 
a limit of scarcity is set on each 'supply', while it is the 'utihty' 



34 WORK AND WEALTH 

accorded by consumers that gives economic force and meaning 
to 'demand'. Hence production is conceived as a process which 
rolls up costs into commodities, consumption as a process that 
unrolls them into utiHties. 

Now an organic interpretation of industry cannot accept this 
mode of conceiving the productive and consumptive functions. 
Considerations of the organic origins of industry lend no support 
to the assumption that production is all 'cost' and no 'utility', 
consumption all 'utiHty' and no 'cost'. On the contrary, in our 
human analysis of economic processes we shall rather expect to 
find costs and utilities, alike in their sense of pains and pleasures 
and of organic losses and organic gains, commingled in various 
degrees in all productive and consumptive processes. 

Our aim will be to set out, as well as we can, reliable rules for 
exam-ining the productive and consumptive history of the various 
sorts of concrete marketable goods so as to discover the human 
elements of cost and utility contained in each, and by a computa- 
tion of these positives and negatives to reach some estimate of 
the aggregate human value contained in the several sorts of 
commodities which form the concrete income of the nation and 
in this income as a whole. Only by some such process is it possi- 
ble to reach a knowledge of the real wealth of nations. 

We may state the problem provisionally in three questions : 

1. What are the concrete goods and services which constitute 

the real national income? 

2. How are these goods produced? 

3. How are they consumed? 

But in truth the consideration of the so-called 'concrete' na- 
ture of these goods is as irrelevant to our analysis as that of the 
money ticket placed on them. For from the standpoint of wel- 
fare these goods are nothing but the activities of those who pro- 
duce and consume them, or, if it be preferred, the human processes 
of production and consumption. The human meaning of any 
given stock of wheat in our national supply will consist of the 
efforts of body and mind, the thought and desire and directed 
skill, put into the several processes of preparing the soil, sowing, 
tending, reaping and marketing the wheat, undergone by the 
farmer in Manitoba or in Norfolk, the merchant, shipper, miller, 



REAL INCOME: COST AND UTILITY 35 

baker who convey it from the farm and convert it into bread, and 
finally the activities of mastication, digestion and assimilation 
with the accompanying satisfaction as it passes into the physical 
system of the consumer. And so with every other sort of con- 
crete marketable goods or services. From the standpoint of 
human value, they are wholly resolvable into the physical and 
mental activities and feehngs of the human beings who produce 
and consume them. It is the balance of the desirable over the 
undesirable in these several activities and feehngs that consti- 
tutes the human value of any stock of marketable goods. The 
standard of desirabiHty will be the conception of the organic well- 
being of the society to which the individuals whose activities and 
feelings are concerned belong. 

Or the several stages of interpretation may be expressed as 
follows. A given money income must first be resolved into the 
concrete goods which it expresses: those goods must then be re- 
solved into the various efforts of production and satisfactions of 
consumption, estimated according to the current ideas and de- 
sires of the individuals who experience them: these current in- 
dividual estimates of the desirable must be adjusted by reference 
to an ideal standard of the socially desirable. The extent of this 
latter process of adjustment will, of course, depend upon how 
far the actual current ideas and feehngs of individuals are kept 
in essential harmony with the true standard of social well-being 
by the natural evolution of an organic society. 

§ 6. Our task in seeking to devise a method for the human in- 
terpretation or valuation of Industry consists then in confront- 
ing the goods which form the net consumable income of the com- 
munity, and in finding answers to the two related questions : 

What are the net human costs involved in their production? 

What are the net human utilities involved in their consump- 
tion? 

A simple sum in subtraction should then give us the result we 
seek — so far as any such quantitative calculus is valid and feasi- 
ble.i 

Now though economists, of course, are well aware that many 

^ The exceedingly important question of the limits to the validity of such a 
quantitative calculus is discussed in the concluding chapter. 



36 WORK AND WEALTH 

of the processes of production contain elements of pleasure and 
utility to the producers, while some of the processes of consump- 
tion contain elements of pain and cost to the consumers, they 
have, rightly from their standpoint, ignored these qualifications 
in their general formulae, and have represented ' goods ' from the 
producer's side as consisting entirely of accumulated costs, while 
from the consumer's side they constitute pure utility. Though 
our brief preliminary survey of the origins of industry indicates 
that no such sharp distinction between production and consump- 
tion can ultimately be maintained, and that throughout the whole 
continuous career of goods from cradle to grave the activities 
bestowed on them are composites of pleasure and pain, cost and 
utility, organic gain and organic loss, socially desirable and so- 
cially undesirable, it will be expedient to take our start from the 
commonly-accepted economic position, and to give separate con- 
sideration to the human values underlying processes of production 
on the one hand, processes of consumption on the other. 

The general lines along which such an investigation must pro- 
ceed are unmistakable. 

In order to express business 'costs' in terms of human cost, 
we require to know three things : 

1. The quality and kind of the various human efforts involved 

in the business 'cost'. 

2. The capacities of the human beings who give out these 

efforts. 

3. The distribution of the effort among those who give it out. 
Corresponding strictly to this analysis of ' costs ' of Production 

will be the analysis of ' utility ' of Consumption. There we shall 
want to know: 

1. The quality and kind of the satisfaction or utility yielded 

by the 'economic utility' that is sold to consumers. 

2. The capacities of the consumers who get this 'economic 

utility'. 

3. The distribution of the economic utility among the con- 

suming public. 
The humanist criticism of Industry is condensed into this 
analysis. The humanist requires that the effort expended on 
any sort of production shall be such as to contain a minimum of 



REAL INCOME: COST AND UTILITY 37 

painful or injurious or otherwise undesirable activity. His com- 
plaint is that Industry, as actually organised and operated under 
a system which treats all forms of productive human effort as 
marketable goods, does not secure this human economy. The 
humanist requires that the persons set to give out undesirable 
effort, 'human cost', shall be those best capable of sustaining 
this loss. Weak women or children, for example, shall not be 
set to do work heavy or dangerous in its incidence, when strong 
men are available who could do it easily and safely. The human- 
ist requires that undesirable or humanly costly work shall not 
merely be confined to classes of persons capable of performing 
it most easily and safely, but that the distribution of such effort 
shall, as regards length of time and intensity of pace, be such as 
to reduce the human cost per unit of product to a minimum. 
The humanist criticism of Industry upon the Costs side consists 
in pointing out that there is no adequately reliable or normal 
tendency for the business economy of costs to conform to this 
three-fold human economy. 

Similarly, turning to the consumption side, the humanist 
points out: i. That many of the 'goods' sold to consumers are 
inherently destitute of human utihty, or, worse, are repositories 
of disutiHty; and that money values is no true key to human util- 
ity. 2. That the amount of utihty or welfare to be got out of 
any goods depends upon the character, the natural or acquired 
capacity, of the particular consumers or classes of consumers 
into whose hands they fall. 3. That a true economy of consump- 
tion, therefore, involves their distribution among consumers in 
proportion to their capacity to use them for purposes of welfare. 
It is contended that the current working of our industrial system, 
on its distributive and consumptive side, makes no reliable pro- 
vision for securing that the maximum of human utiUty shall at- 
tach to the consumption of the national income. 

§ 7. To test in detail the exact validity of this humanist criti- 
cism would require us to examine the costs and the utility, eco- 
nomic and human, represented in each item of all the various 
suppHes of goods and services which constitute the national in- 
come. This is manifestly impracticable. Nor is it necessary for 
our purpose, which is to estabhsh a sound method of valuation 



38 WORK AND WEALTH 

rather than to endeavour to form an exact computation of the 
values it discloses. With this object in view it will be sufficient 
to direct our enquiry to the accepted classes or grades of human 
activities figuring as economic costs, and the corresponding 
classes or grades of human utilities affected by consumption. 

Let us begin with the 'costs' side. 

Accepting the general categories of costs of production, as 
rent, interest and profit, salaries and fees, wages (for all other 
business 'costs', as for instance, cost of material, machinery, 
fuel, can be resolved into these), let us consider what is the nature 
of the human costs for which these pa5rments are made, in the 
chief orders of industry, and how these human costs are related 
to the economic costs. 

At the outset of this enquiry, however, it will be convenient 
to ehminate one economic ' cost ' of considerable magnitude from 
our consideration, viz. economic rent. For, although Nature, 
or the earth, may in a study of objective industry be regarded 
as a productive agent, yielding materials, physical energy, and 
special utiUties, this work involves no human effort, and there- 
fore is represented by no human cost. This statement, of course, 
by no means implies that human foresight and activities play no 
part in the effective supply of land and other natural resources. 
Such resources, hitherto existing outside the industrial system, 
are continually being discovered, brought within reach and de- 
veloped by human skill and effort, while new or improved uses 
are continually being obtained from natural resources already 
within reach. In such processes of discovery and development 
much capital, abihty, and labour, are constantly engaged, the 
costs of which must be defrayed. Moreover, in certain uses of 
land for agricultural and other purposes, provision must be made 
for wear and tear or replacement. But all such costs or expenses 
are really payments for the capital and labour employed on this 
work of development or upkeep. They are not payments for 
the use of natural resources. They are not economic rent. That 
business cost has no human cost attached to it. From the stand- 
point of the manager of a particular business the payment of 
rent is necessary to enable him to get the use of the land or other 
natural agent he requires. Where private property in land ex- 



REAL INCOME: COST AND UTILITY 39 

ists, the payment of such rent is legally necessary. Where the 
maintenance of such legal rights has enabled land values to ex- 
change freely with other forms of wealth, a moral expediency may 
be claimed for the payment of rent. But no human cost corre- 
sponds to it. In the organic interpretation of industry, it figures 
as waste. While, therefore, due account must be taken of this 
division of wealth or human utiHties in any final survey of our 
social economy, it may be dismissed from our immediate con- 
sideration. 

§ 8. In order to get a clear understanding of industry regarded 
from the standpoint of human costs, it will be convenient to 
fasten our attention first on the structure and working of the 
single businesses which are the productive units of the system. 
For the business is a closer, more compact, and more intelligible 
structure than the trades, markets, or other larger divisions of 
industry. We shall, therefore, endeavour to analyse the com- 
binations of human effort as they are expressed in the various 
types of business, so as to discover and to estimate the human 
costs that are involved. 

Though the term Business, as we use it here, must be extended 
so as to include all sorts of centres of economic activity not com- 
monly included, such as a school, a doctor's practice, a theatre, 
it will be best to take for our leading case an ordinary manufac- 
turing business. Here are gathered into close cooperation a large 
number of human and non-human factors of production. The 
centre of the Httle system is the manager, employer, or director, 
whose ideas, desires, and purposes govern and regulate the move- 
ments of the various forms of capital and labour. This man has 
got together on his premises a quantity of machinery and other 
plant which express a complicated growth of invention running 
far back into the past and derived from great numbers of human 
brains. These machines and plant embodying these inventive 
ideas were made by past labour of various kinds. This manager 
or director, in planning the Business, chose what seemed the best 
apparatus for the purposes he had in mind. He induced a num- 
ber of investors or capitalists to lend the money which enabled 
him to obtain this apparatus, and to hire the various sorts of 
labour power required to operate it. This labour power itself is 



40 WORK AND WEALTH 

the product of the energies of man in the past, the direct ancestry 
of the labourers who produced the beings that give forth the 
labour-power, the past generations of men whose growing knowl- 
edge and practice yielded the training and the habits of industry 
and of cooperation essential for the productiveness of labour in 
the modern arts of industry. 

Here are evidently many different sorts of human effort, some 
of them physical, others intellectual, some pleasurable, others 
painful, some beneficial, others detrimental, to the individuals 
who give out the effort, or to society. 

All of these productive energies rank in Political Economy as 
'costs', and as such are remunerated out of the product. Which 
of these are human 'costs' and in what sense and what degree? 
Such are the questions that lie immediately before us, if we are 
seeking to reduce our £2,000,000,000 to terms of human well- 
being. 

§ 9. In this conversion of economic into human costs we can 
best begin by considering the fundamental distinction between 
creation and imitation, enforced with so much penetration by the 
French sociologist, M. Tarde. It is not in its primary signifi- 
cance a doctrine of costs, but a division of productive energy into 
two classes. All social progress, indeed all social changes up- 
wards or downwards, according to this theory, comes about in 
the following way. Some unusually powerful, original, or enter- 
prising person, assisted often by good fortune, makes what is 
called a discovery, some true and useful way of doing things or 
of thinking about things, or even of saying things. This new 
truth, new phrase, new dodge, is capable of being recognised as 
interesting or useful, not only by its discoverer, but by the many 
who had not the wit or the courage or the luck to discover it for 
themselves. By suggestion, infection, contagion, or conscious 
imitation, or by any combination of those forces and habits that 
constitute the social nature of man, the novelty becomes adopted 
and applied by an ever-growing number of persons, over a widen- 
ing area, until it becomes an accepted practice or convention of 
the whole society. Every new religious or moral idea or senti- 
ment, every scientific law, every invention in the arts of industry, 
every development of a new taste, thus proceeds from one or 



REAL INCOIVIE: COST AND UTILITY 41 

more special centres of original discovery, and spreads by a well- 
nigh automatic process of expansion or imitation. 

§ 10. Now tliis distinction between creation and imitation, 
as propounded and applied by M. Tarde, is doubtless open to 
serious objections. The psychology of imitation is shallow, for 
under this single term is covered what are in reality many dif- 
ferent actions, while the whole conception of imitation as a pro- 
cess is too mechanical. To some of these defects we shall refer 
presently. But though, regarded as an explanation of the pro- 
cesses of human progress, the antithesis of creation and imitation 
does not satisfy, it furnishes an exceedingly useful starting point 
towards a psychological analysis of economic processes. For in 
the evolution of industry it is quite evident that improvements 
do come about in this manner. A comparatively small number 
of original or curious minds invent new uses or new ways of doing 
things that are better than the old, or they recognise the value 
of new ideas which others failed to recognise, and they have the 
energy and enterprise to put the new ideas into operation. Many 
of the inventions are not good enough or big enough; only by a 
considerable number of little increments of novelty will a new 
machine, or a new process, emerge into economic vitality, or, in 
business language, become profitable. But where an invention 
or improvement has once emerged, imitation multiplies it and it 
passes into general use.-^ 

A comparatively small number of creative or inventive minds 
thus undoubtedly play an exceedingly important part in the 
development of industry. The brief acts of thinking of a Watt, 

^ Tarde applies the same term ' imitation ' to two different sorts of act. The busi- 
ness man or employer who recognises some improved machine or method and copies 
it is an imitator. Every improvement thus starting from a centre of discovery be- 
comes diffused throughout a trade. 

But the term 'imitation' is also applied to the regular work of the routine 
operator, who is constantly engaged in repeating some single process. Now, re- 
garded as psychological and as economic facts, these two imitations are distinct. 

The former is the adoption of a discovery involving an act of recognition and of 
judgment — not a purely automatic imitation — at any rate until it has become a 
common form in the trade. The employer who copies or adopts an improvement 
performs a single act — he incorporates this improvement in the technique of his mill 
or shop — once for all. When, however, it is said of a machine-worker that his work 
is imitative, something different is meant. He is continually repeating himself, 
each act of repetition involving less consciousness in the adaptation of means to end. 



42 WORK AND WEALTH 

a Stevenson, a Siemens or an Edison, appear to be incomparably 
more productive in effect than the routine life-toil of the many 
thousands of workers who simply repeat hour by hour, day by 
day, year by year, some simple single process they have learned. 
It is true that invention is too narrow a term properly to express 
the distinction we are examining between that work which ex- 
presses the creative energy of man and that which is essentially 
imitative. For if a successful invention furnishes machinery or 
methods which thus multiply the productivity of human labour, 
the skilful organisation and administration of a business, the 
work done by the employer, has the same sort of effect. An able 
employer who directs his business with knowledge and foresight, 
gathering together just the right men, materials and machinery, 
producing the right goods at the right time, and marketing them 
properly, seems by his personal ability greatly to enlarge the 
valuable output of the entire business. In a big business he seems 
to be as productive as a thousand men. 

§ II. So a broad distinction is built up between Ability and 
common Labour, the creative and the merely imitative work of 
man. From this distinction has been drawn an ingenious de- 
fence of the current inequalities in distribution of wealth. Since 
all the progress of modern industry is really attributable to the 
ability and enterprise of a small group of inventing, organising 
and enterprising people, common labour being in itself no more 
skilful, no more productive than before, there can, it is main- 
tained, be neither justice nor reason in the claims of labour to a 
larger share of that huge increase of wealth due to the ability 
of the few. 

I do not propose just now to examine the validity of this con- 
tention. What criticism I have to offer will emerge in the course 
of my closer examination of the nature of industrial work. At 
present I will only ask readers to observe that the doctrine as- 
sumes that payment for industrial services must or ought to be 
determined by the productivity of those services, not by their 
'cost'. 

Now, our immediate enquiry, we must remember, is into hu- 
man costs. And the distinction between creative and imitative 
work is particularly instructive in its bearing upon human costs. 



REAL INCOME: COST AND UTILITY 43 

For if we grade the various sorts of human effort that contribute 
to the production of wealth according to the amount of creative 
and imitative character they seem to possess, some valuable light 
will be thrown upon the distribution of human costs among the 
various classes of producers. 

Leaving out of consideration Land, which, as a factor in pro- 
duction, involves no output of human effort, we shall find that 
the provision and application of all the other factors, abihty, 
capital and labour, involve some human effort both of a creative 
and an imitative type and contain some elements of 'cost'. 

For the purpose of this analysis I propose to classify productive 
activities under the following heads: Art, Invention, Professional 
Service, Organisation, Management, Labour, Saving. The war- 
ranty for this classification will emerge in the course of the analy- 
sis. 



CHAPTER IV 

THE CREATIVE FACTOR IN PRODUCTION 

§ I. The most distinctively creative kind of human work is 
called art. In motive and in performance it is the freest expres- 
sion of personality in work. The artist in what are termed the 
fine arts, e. g. as painter, poet, sculptor, musician, desires to give 
formal expression to some beautiful, true or otherwise desirable 
conception, in order either to secure for himself its fuller realisa- 
tion or the satisfaction of communicating it to others. It is not, 
however, necessary for our purpose to enter upon the exact psy- 
chology of art motives or processes. Indeed, we are not concerned 
with the whole range of artistic activity. So far as the artist 
works simply and entirely for his own satisfaction, in order to 
express himself to himself, he cannot be deemed to be contribut- 
ing to the economic income of the nation. For us the artist is the 
producer of a marketable commodity, and we are concerned to 
discover the 'economic' and the 'human' costs which he incurs 
in this capacity. 

Now so far as the painter, poet, or musician works as pure 
artist, exercising freely his creative faculty, his economic ' costs ' 
consist merely of his 'keep', the material and intellectual con- 
sumption necessary to support him and to feed his art. The net 
human costs of the creative work are nil. For though all creative 
work may involve some pains of travail, those pains are more than 
compensated by the joy that a child is born. Even if we dis- 
tinguish the creative conception from the process of artistic exe- 
cution, which may involve much laborious effort not interesting 
or desirable in itself, we must still remember that these labours 
are sustained and endowed with pleasurable significance as means 
to a clearly desired end, so that the whole activity becomes in 
a real sense a labour of love. In other words, the human costs 
are outweighed by the human utility even in the processes of 
production, so that the pure practice of art is a net increase of 

44 



THE CREATIVE FACTOR IN PRODUCTION 45 

life. The artist, who, following freely his own creative bent, pro- 
duces pictures, plays or novels which bring him in great gains, 
is thus in the position of being paid handsomely for work which 
is in itself a pleasure to perform and which he would do just as 
well if he were only paid his human ' keep '. The wasteful social 
economy of the ordinary process of remunerating successful art- 
ists needs no discussion. For the true art faculty resembles those 
processes by which Nature works in the organic world for the in- 
crease of commodities whose comparative scarcity secures for 
them a market value. A poet who 'does but sing because he 
must', and yet is paid heavily for doing so, is evidently getting 
the best of both worlds. Our present point, however, is that the 
' economic cost ' which his publisher incurs in royalties upon the 
sales of his poem is attended by no net 'human cost' at all, but 
by a positive fund of 'human utility'. And this holds of all truly 
creative work: the performance involves an increase of Hfe, not 
that loss which is the essence of all human cost. 

§ 2. I have spoken of the pure 'artist'. The artistic producer 
who sells his freedom to the moneyed public may incur the heavi- 
est of human costs, the degradation of his highest quality. The 
temptation to incur these moral and intellectual damages is great 
in any nation where the dominant standard of personal success 
is money income and expenditure. But perhaps there is a false 
simplicity in the romantic view of artistic genius, which assumes 
that the artist and his work are necessarily degraded by induce- 
ments to work for a public, instead of working for himself alone. 
It may, indeed, be held that an artist who is so self-centred as to 
have no conscious consideration of the artistic needs and capa- 
bihties of his fellow-men, is so essentially inhuman as to be in- 
capable of great work. The use of an art-gift for communion 
with others, involving some measure of conscious social direction, 
seems involved in the humanity of the artist. Even when that 
direction takes the shape of market-prices, it does not necessarily 
incur the violent censure bestowed by romantic persons. When 
a sound public taste operates, this direction may be justified. 
The portraits which Mr. G. F. Watts painted reluctantly for 
money need not be considered a waste of his powers. The nature, 
again, of many creative minds seems to require the application 



46 WORK AND WEALTH 

of an external stimulus to break down a certain barrier of sterile 
self-absorption or of diffidence, which would rob humanity of 
many of the fruits of genius. At any rate it need not be assumed 
that working for a pubUc, or even for a market, is essentially in- 
jurious. Where the taste which operates through the demand is 
definitely base, and where the practice and the consciousness of 
having sold one's soul for money are plainly realised, no doubt 
can exist. But where pubhc sympathy and appreciation, even 
exercised through the market, induce the artist to subordinate 
some of his private tastes and proclivities to the performance of 
work which, though of secondary interest to himself, has a sound 
social value, the pressure of demand may produce a larger body 
of real wealth at no real human cost to the producer. Very dif- 
ferent, of course, are the instances urged with so much passionate 
insistence by Ruskin, where depraved public tastes, springing 
directly from luxury and idleness, debauch the natural talents of 
artists, and poison the very founts of the creative power of a na- 
tion. Corruptio optimi pessima. The production of base forms 
of art, in painting, music, the drama, Hterature, the plastic arts, 
must necessarily entail the highest human costs, the largest loss 
of human welfare, individual and social. For such an artist 
poisons not only his own soul but the social soul, adulterating 
the food designed to nourish the highest faculties of man. 

There is, however, a sense in which it is true that every pressure 
of social direction or demand upon the artist impairs the creative 
character of his work. For such social demand rests upon a sim- 
ilarity of taste among the members of a public, and its satisfac- 
tion requires the artist to repeat himself. An artist, endowed by 
the State or some other body, might express himself in unique 
masterpieces, as was the case with the great artists of antiquity 
or of the Renaissance who were fortunate in their private or 
pubHc patrons. But art, supported by numerous private pur- 
chasers, whose social standards mould their tastes to tolerably 
close conformity, must stoop to qualify creation by much imita- 
tive repetition. This often involves a large human cost, im- 
posing an injurious specialisation, mannerisms or mechanical 
routine. This is particularly true of arts where a refractory 
material gives great importance to technique, and where the 



THE CREATIVE FACTOR IN PRODUCTION 47 

practice of this technique necessarily restricts the spontaneity 
of execution. 

§ 3. The descent from Artist to the more or less mechanical 
producer of art-products is marked by many grades. There is 
the grade which does not pretend to any free exercise of the 
creative faculty, confining itself to interpretation or execution. 
This in music and in certain other fine arts is signified by adopt- 
ing the French term 'artiste'. But some of this interpretative 
work affords large scope for truly creative work. A traditional 
or written drama, a score of music, or other necessarily imper- 
fect and half-mechanical register of some great creative work, 
requires a constant process of re-creation by a sympathetic spirit. 
In such arts there is a genuinely creative cooperation between 
the original composer and his interpreters, the latter enjoying 
some real liberty of personal expression and giving merit to the 
performance by this union of reproductive and creative achieve- 
ment. The great actor or musician may thus even come to use 
the work of the playwright or the composer as so much material 
for his own creative expression. He may even carry this to an 
excess, ousting his predecessor and parasitically utihsing his rep- 
utation for the display of his own artistic qualities or defects. 
In painting and sculpture, of course, we come to a mode of skilled 
imitation, that of the cop3dst, where the free creative element is 
confined to far narrower limits. The main skill here is that of 
technical imitation, not of interpretation. 

As we descend from the higher grades of distinctively creative 
art to these interpretative and more or less imitative grades, it 
will be evident that larger human 'costs' of production are apt 
to emerge. All imitation or repetition, either of oneself or of 
another, is not inhuman. There is a rhythm in the processes of 
organic life which even requires some repetition. But this repe- 
tition is never precise, for organic history does not exactly repeat 
itself. The attempt, therefore, to induce a person to perform an 
intricate process many times and at short intervals with great ex- 
actitude, is against humanity. It involves some physical and 
moral injury, a human cost. We shall consider the more serious 
effects of this procedure when we come to consider that work of 
industry most widely removed from art. In considering, how- 



48 WORK AND WEALTH 

ever, the sub-artistic workers it will not be right to rate the hu- 
man costs too high. A good deal of scope for personal satisfaction 
remains in many of these kinds of work. The sense of skill in 
overcoming difHculties, evoked wherever any intricate work is 
done by brain and hand, yields a vital Joy. This the executant 
artist, even though mainly a copyist, experiences in no mean 
measure. It sustains a fine vitality, and, what is significant for 
our particular enquiry, it involves low human cost, unless the 
pace and strain of repetition are carried to excess. Wherever any 
reasonable scope for individual expression or achievement re- 
mains, though the main body of the product may be rigorously 
prescribed by close imitation, or ordered by mechanical contriv- 
ance, the art spirit Hves and the human costs are low. The 
photographer, or even the skilled performer on the pianola, re- 
tains a larger measure of the nature and the satisfaction of the 
artist than a merely cursory consideration of his occupation 
would suggest. 

A considerable and growing proportion of productive energy 
is given out in these various levels of artistic or creative work, 
and the proportion of the national income represented by this 
product is growing with fair rapidity in every modern civiHsed 
community. 

§ 4. From the fine arts we proceed by an easy transition to the 
processes of discovery and invention which play so important a 
role in progressive industry and are leading channels of creative 
activity. The process of discovering a new relation between 
phenomena, establishing a new fact or a new law, has much in 
common with artistic creation. The scientific imagination is 
creative through its use of the existing material of knowledge to 
frame hypotheses. Indeed, the disinterested play of the mind 
in the explanation of facts by bringing them within the range of 
scientific laws, or, conversely,' in extending the range of known 
laws to new groups of facts, is a process of adventure containing 
novelties of insight and of outlook akin to artistic production. 
Those philosophers, indeed, who hold that the laws of science are 
nothing other than the patterns which man imposes upon the 
phantasmagoria of experience for his own private ends, would 
make the whole of scientific discovery merely an art, differing 



THE CREATIVE FACTOR IN PRODUCTION 49 

from the fine arts in having utility rather than beauty for its 
goal. But we need not press this interpretation in order to per- 
ceive the similarity of all disinterested pursuit of knowledge to 
the fine arts. When a mathematician speaks of a beautiful solu- 
tion to a problem, he is not using the language of hyperbole, but 
attesting to the presence of an aesthetic emotion attendant on 
the mode in which a truth is reached and stated. Modern physics 
is full of discoveries containing some such artistic quality, e. g. 
the grouping of the elements in the proportions of their atomic 
weight which Mendelieff estabhshed, or Sir W. Ramsay's recent 
discovery of the relations between hehum and its chemical kin- 
dred. But one need not labour the analogy between artist and 
scientist. For our main enquiry is into human costs, and it will 
be admitted that the zest of the scientific student and the joy of 
discovery are emotions as vital and as valuable in themselves as 
the emotions of the artist. So far, then, as the scientist comes 
within our purview as a productive agent, his activity must rank 
with the artist's, as yielding more human utihty than cost. It 
may, however, be contended that the man of science seldom, 
as such, enters into the field of industrial productivity, save when 
he adds to his scientific work the role of inventor. With the ad- 
vent of the inventor the attainment of knowledge is bent to some 
purpose of industrial utility. But though some definitely gainful 
purpose may lurk in the inventor's mind, it does not commonly 
impose upon his work the distinctive costs of labour. For inven- 
tion, however narrowly utilitarian in its objects and results, still 
remains in the realm of creation, still yields the satisfaction of a 
production that is interesting and elevating in itself. It seems 
to matter little whether the inventive process is a large bold spec- 
ulative handling of some problem in which the inventor is a 
pioneer, or whether he is engaged upon the narrower task of 
bringing the past inventions of many greater minds up to the 
level of industrial utility by some small new economy. The pro- 
cess of invention carries the quality of interesting novelty which 
from our standpoint is the badge of creative work. We shall, 
doubtless, be reminded at this point that history shows the path 
of the inventor to be almost as hard as that of the transgressor, 
strewn with toil and disappointments. But though a great in- 



50 WORK AND WEALTH 

vention, like a great v/ork of art, often conceals an arduous and 
painful gestation under the appearance of a spontaneous genera- 
tion, too much must not be made of such a cost. 

The training of a creative faculty, though Hke all training it 
involves an exercise and a discipKne not pleasing in themselves, 
can, indeed, scarcely be regarded in our sense as a cost of labour. 
It is a furtherance and not a repression of personahty: the prac- 
tice it involves, the technique it imparts are not merely mechani- 
cal aptitudes, and they always carry in them the conscious hope 
of creative achievement. The education of artistic or inventive 
faculty involves no real wear and tear of human vitality beyond 
that physical waste which every prolonged occupation involves. 
Invention itself involves no cost. In none of these operations is 
the characteristic of labour present, the giving-out of some single 
sort of energy by constant repetition of identical acts in a narrow 
groove of endeavour. Such acts of labour are indeed inimical to 
invention: the act of invention comes commonly in times of 
leisure. It is the product more of play than of work, and the ele- 
ment of instinct, perhaps even of chance, is often a factor of 
success. 

§ 5. M. Tarde, in his abrupt contrast between creation and 
imitation or labour, has dogmatised upon the rarity of the crea- 
tive faculty, and certain other sociologists and politicians have 
busily engaged themselves in sowing fears lest the greed of or- 
ganised labour or the rashness of sociahstic legislation should, by 
robbing genius and ability of its proper rewards, tamper with the 
springs of industrial progress. Now, the important question of 
the economic reward of ability and genius may be deferred until 
we have ascertained more clearly what part these creative quali- 
ties play in all the different modes of productive energy. But 
the assumption that artistic and inventive faculty is exceedingly 
rare, because it has so seldom been displayed, must be boldly 
challenged. The studies of modern psychologists and education- 
alists refute it. On the contrary, there is reason to believe that 
human nature is exceedingly rich in all sorts of variations from 
the normal, and that very many of these variations have valua- 
ble uses, provided that suitable conditions for their discovery, 
training and application are present. 



THE CREATIVE FACTOR IN PRODUCTION 51 

The notion that genius, like murder, will 'out' is a false sen- 
timentalism. Some men of genius do, indeed, make their way 
in spite of adverse circumstances, forcing themselves out of the 
obscurity of their surroundings: they 'break their birth's invid- 
ious bar, and breast the blows of circumstance, and grasp the 
skirts of happy chance.' That is to say some sorts of genius are 
united with qualities of audacity, persistence, and luck, which 
enable them to win 'through'. But how many men of genius do 
not possess these faculties and therefore do not emerge, it is from 
the nature of the case impossible to learn. But it is probable 
that much genius, talent, and ability, capable of yielding fine so- 
cial service, is lost. Indeed it is probable that many of the finest 
human variations, involving unusual delicacy of feeling and per- 
haps of physique, will by natural necessity be incapacitated for 
making their way and forcing recognition amid uncongenial 
surroundings. 

It is likely that far more human genius is lost than is saved, 
even in the more civilised nations of to-day. For what are the 
conditions of the successful utilisation of genius, and for what pro- 
portion of the population are they securely attained? 

Leisure is a first condition for all free and fruitful play of the 
mind. Very few inventions have come from workers compelled 
to keep their noses to the grindstone, and unable to let their eyes 
and thoughts play freely round the nature of their work. This 
is why slavery contributed so very little to the development of 
the industrial arts: this is why so comparatively few inventions 
of importance have been made by hired labourers in this and 
other countries. The strongest economic plea for a shorter and 
a lighter working-day is that it will liberate for invention and in- 
dustrial progress the latent creative energy of countless workers 
that is stifled under the conditions of a long day's monotonous 
toil. 

Education is the next condition. The great mass of the popula- 
tion in this country have no such opportunity of education as is 
needed to discover, stimulate, and nourish the creative faculties 
in art, science, and industrial invention. One need not overrate 
what even the best education can do for human talent of the crea- 
tive order. Indeed, the education of the schools may sometimes 



52 WORK AND WEALTH 

rather injure than improve the finest faculties. But education 
can do one incomparable service to native genius or talent. By 
putting the sensitive mind of a young man or woman in contact 
with the innumerable waves of thought astir in the intellectual 
atmosphere around, it supplies the first essential of all creative 
activity, the fruitful union of two thoughts. Until all the new 
minds brought into the world are placed in such free contact with 
every fertilising current of thought and feeling, and enjoy free, 
full opportunities of knowing the best that has been thought and 
said in all departments of human knowledge, we cannot tell how 
much creative faculty perishes for lack of necessary nutriment. 

§ 6. From artistic and inventive work which is essentially 
creative, enjoyable, vitally serviceable and costless, we proceed 
to review the regular skilled mental work of the professional and 
administrative classes. 

The bulk of the productive energy classed as Ability comes 
under these heads. 

It is evident that in most of this work the creative quality is 
blended in various degrees with imitation or routine. We pass 
from the more miraculous, interesting, and rapid modes of pro- 
ductive achievement to a lower level, where the expenditure of 
time and effort is greater and where the terms 'practice' and 
'practitioner' themselves attest the m.ore confined nature of the 
activities. There can be no doubt that the practice of law or 
medicine, even in its highest walks, involves a good deal of toil- 
some and almost mechanical routine, though the most successful 
practitioners generally shift the bulk of this burden on to the 
lower grades of the profession. 

The practice called ' devilling ' in the law illustrates my mean- 
ing. But every profession has its lower grades of routine workers, 
assistants, dispensers, nurses, clerks and others, whose sphere of 
liberty is closely circumscribed, and whose work, although in- 
volving some qualities of personal skill and responsibihty, mainly 
consists in carrying out orders. 

This consideration of the subsidiary professional services brings 
to light, however, a certain defect in the use of the antithesis 
between creation and imitation, regarded as an index of humanly 
desirable and humanly undesirable work. 



THE CREATIVE FACTOR IN PRODUCTION 53 

Mere repetition or close routine is not the distinctive character 
of much of this work. The work of a private secretary, clerk, 
or other subordinate to a professional man or a high official, may 
contain much variety and novelty in detail or even in kind. The 
same may be true of the work of a valet or other personal attend- 
ant. It apphes to all work which consists in carrying out an- 
other's orders. There may be plenty of variety and scope for 
skill in such work; in its initial stage, as conceived by the chief 
or employer, it may contain elements of creative energy. But 
the subordinate does not reap these elements of personal inter- 
est because the initiation of the process does not rest with him. 
The essentials of the work are imposed upon him by the intellect 
and will of another: neither the design nor the mode of execution 
is his own. Though, therefore, his work may not consist in mere 
routine, but may be widely varied, the fact that it is not properly 
'his' work, the expression of 'his' personality, deprives it of all 
qualities of creation or achievement, save such fragments as 
adhere to the details that are ' left to him. ' Such work may, in- 
deed, be described as imitative, in that it consists in executing a 
design prescribed to him by another. But if the term imitation 
be required, as it is, to designate the sort of labour which consists 
in constant repetition of a single act or process, it would be better 
to mark this distinction between free agent and subordinate in 
a different way. The subordination of the secretary or the clerk 
involves the human cost of a surrender of his personal judgment 
and initiative. To the extent that he does this, he becomes an 
instrument of another's will. The extent to which this involves 
a human cost will vary greatly with the particular conditions, 
technical or personal. Where such subordination belongs to 
genuine education or apprenticeship, or where close sympathy 
and mutual understanding happen to exist between superior and 
subordinate, so that the mind of one is the mind of both, no hu- 
man cost at all but a human utility may emerge. Or, in other 
cases, the technical nature of the work may involve the necessity 
of leaving to the subordinate a good deal of discretion and a cor- 
respondingly large field for personal expression. But where the 
subordinate becomes the mere tool of his master, a heavy cost is 
entailed. That cost is heavier indeed than in ordinary manual 



54 WORK AND WEALTH 

routine labour, because it involves more directly the subordina- 
tion of the mind and will of the worker. Part of the distaste for 
domestic and other closely personal service is due to the closer 
bondage of the whole personality that is involved in the relation. 
It is not so much that the work is intrinsically dull or unpleasant 
as that it encroaches upon personality and inhibits initiative 
and achievement. 

§ 7. The work of the highest, most honoured and best remuner- 
ated members of the professions retains essentially the quality 
of personal achievement. It consists of a number of detached 
and usually brief acts of intellectual skill, the formation of a judg- 
ment upon the meaning or merits of a complicated case, the pres- 
entation of that judgment in advice or argument, the bringing 
intellectual and moral influences to bear upon some line of con- 
duct. 

In some instances, as in the argument of a difficult case in 
court, or the conduct of a complicated Bill in Parliament, pro- 
longed and arduous exertion, both mental and physical, may be 
involved. Even where the separate acts require no prolonged 
output of energy, a professional career, comprising long series 
of such acts, may strain or exhaust the mental and physical re- 
sources even of a strong man. Though each case will be different, 
and will call for qualities of personal skill and judgment, inter- 
esting and agreeable in their exercise, all will fall within the limits 
of a special line of practice, and this specialism will wear upon the 
nervous system, bringing the activity under an economy of costs. 
The temptations of a busy and successful professional career in- 
sidiously sap the interest and joy which attend the earlier strug- 
gle, unless a man has the rare wisdom and the strength of will 
to limit his amount of work and income. 

What is said here of the competitive professions is in large 
measure appHcable to the official grades of the public services. 
The higher sorts of official work continually involve quahties of 
judgment and imagination, and there is little mere repetition. 
As one descends to the lower official levels, the routine or repeti- 
tive element increases, until one reaches a sort of official, the 
liberty, initiative, skill, and interest of whose work hardly exceeds 
that of the ordinary machine-feeder in a factory. In all such dis- 



THE CREATIVE FACTOR IN PRODUCTION 55 

tinctively routine work there is a heavy mental and even physi- 
cal cost. But there is this distinction between the case of the 
official and of the professional man. The former is not subject 
to the constant drive of the competitive system and is usually 
relieved from the sense of insecurity and anxiety which wears 
upon the mind of most professional men. 

§ 8. The psychology of the entrepreneur or business man is 
one of great interest and complexity. If we take the ordinary 
activities of the manager of a well-established business in a staple 
trade, they do not seem to involve much in the way of high in- 
tellectual skill, imagination, or exploit — but merely a limited 
amount of special trade knowledge, ordinary intelligence, and 
common sense. He has to perform a number of little acts of cal- 
culation and decision. What we call his character, viz. honesty, 
reliability, sense of responsibility, really counts for more than 
intellect: there is little demand for constructive or creative im- 
agination, or for high enterprise. The conduct of such a business, 
even on the part of its manager, though not destitute of interest- 
ing incident, involves a good deal of dull routine and even drudg- 
ery which carries a distinct ' cost ' in mental wear and tear. 

The subordinate officials in such business are, of course, sub- 
jected to a closer routine, though never to a merely mechanical 
repetition, and their working life is less affected by hopes and 
fears relating to the profits or loss on the half-year's working. 

But a large proportion of business men work under very dif- 
ferent conditions from these. 

Most industries to-day are subjected to rapid changes in re- 
gard to instruments and methods of work, markets for materials 
and for finished products, wages and conditions of employment. 
A keen eye for novelties, a rapid judgment, long-sighted calcu- 
lation, commanding character, courage in undertaking risks — 
these are leading notes in the modern business life. 

The business man who constructs, enlarges, and conducts a 
modern competitive business, performs a good many functions 
which call for various mental and moral qualities. He must plan 
the structure of his business — determine its size, the sizes and sorts 
of premises and plant he will require, the place which he can best 
occupy; he must get reliable managers and assistants, and a good 



56 WORK AND WEALTH 

supply of skilled labour of various kinds. He must watch markets 
and be a master of the arts of buying and selling: he must have 
tact in managing employees and a quick eye for improvements in 
methods of production and of marketing: he must be a practical 
financier, and must follow the course of current history so far as 
it affects trade prospects. 

If we take the most generalised type of modern business man, 
the financier who directs the flow of capital into its various chan- 
nels, or the capitalist who lives by managing his investments, 
we find the business ability in its most refined form. For these 
men are the general directors of economic energy, operating 
through joint stock enterprise. 

The human costs of this work of speculation and direction 
are difficult to assess. Such terms as labour and industry are 
alien from the atmosphere of these high economic functions. 
At the same time the strain of excitement, and, at certain seasons, 
of prolonged intellectual effort and attention, the sense of re- 
sponsibility for critical decisions, involve a heavy nervous wear 
and tear. Probably the heaviest human cost, however, is a cer- 
tain moral callousness and recklessness involved in the financial 
struggle. For the paper symbols of industrial power, which 
financiers handle, are so abstract in nature and so remote from 
the human fates which they direct, that the chain of causation 
linking stocks and shares with human work and human life is 
seldom realised. How should the temporary holder of a block of 
shares in Peruvian rubber concern himself with the conditions 
of forced labour in the Amazon forests, or the group formed to 
float a foreign government loan consider the human meaning of 
the naval policy it is intended to finance? Except in so far as 
they affect the values of their holdings and the price at which they 
can market the shares, the human significance of the business or 
political enterprises which are concrete entities behind finance, 
has no meaning for them. These men and their economic ac- 
tivities are further removed from human costs and utilities than 
any other sort of business men. In view of the immense human 
consequences which follow from their conduct this aloofness is a 
demoralising condition. 

So occult and so suspect are many of the operations of financiers 



THE CREATIVE FACTOR IN PRODUCTION 57 

as somewhat to obscure the importance of the actual economic 
services they render to our industrial system. General finance 
is the governor of the economic engine: it distributes economic 
power among the various industries, allocating the capital of the 
saving classes to road-making, irrigation, mining, the equipment 
of new cities, the establishment of staple manufactures, and the 
supply of financial resources for various purposes of government. 
The finest business instincts, the most rapid, accurate, and com- 
plex powers of inference and prophecy, the best balance of au- 
dacity and caution, the largest and best-informed imagination, 
are needed for this work of general finance. It is intensely in- 
teresting, and exerts a fascination which is traceable to a combi- 
nation of appeals. The chief field for high economic adventure, 
it evokes most fully the combative qualities of force and cunning; 
it is full of hazard and fluctuation, with large, rapid gains and 
losses: it neither requires nor permits close personal contact with 
the troublesome or sordid details of industrial or commercial 
Hfe. 

Such is the work of the financier and the skilled investor, 
who found capitalistic enterprises and deal in their stocks and 
shares over the whole area of the industrial world. It is the most 
intellectual and, in one sense, the most 'moral' of business ac- 
tivities, involving at once the finest arts of calculation and the 
fullest faith in human nature. 

For finance is most closely linked with credit, and credit is 
only the business name for faith. When people talk of finance 
as if it were riddled with dishonesty, facts give them the lie. 
The normal honesty of finance is proved by the fact that larger 
and larger numbers of men and women in every country of the 
civilised world are coming to entrust their savings more and more 
to men who are personal strangers, for investment in distant 
countries and in businesses the exact nature of which is unknown 
to them, and over which they cannot hope to exercise an appre- 
ciable control. The working of the machinery of modern invest- 
ment by which millions of men in England, France, and Germany 
have sent their savings to make railways in S. America, or to 
open up mines in S. Africa, or to build dams in Egypt, is the 
largest tangible result of modern education that can be adduced. 



58 WORK AND WEALTH 

It implies the intellectual and moral cooperation of larger num- 
bers of distinct personalities across wider local and national 
barriers than has ever occurred before in the history of the world. 

§ 9. A reasonable faith in the future and a wilHngness to run 
some risk are complementary motives in this growth of financial 
investment. They are, however, by no means confined to opera- 
tions of finance. All industry involves faith and risk-taking. 
Every producer who acts as a free agent conceives some good 
object which he thinks attainable by his work. He may be mis- 
taken, either in conceiving wrongly, or in failing to carry out his 
plan. His failure may be due to want of skill or knowledge, or 
to adverse circumstances. In primitive societies, where a man 
produces mostly for his own use, the risk is less. For he may be 
supposed to know what he wants, how much, and when he wants 
it. But when he makes for others, i. e, for a market, the risks are 
greater. For he will not know so much about the wants of other 
persons as about his own. It might seem as if small local mar- 
kets, in which the producer dealt exclusively with neighbours, 
would carry the least risk, and that the risk would expand with 
each expansion of the market area. But this is not commonly 
the case. As a rule, there is less risk for the producer serving 
a large market, the individual members of which he does not 
know, than a small market of his neighbours. For the fluctua- 
tions of aggregate demand will be smaller in the larger market, 
and though he will know less about the individual contributions 
to its supply and its demand, his risk of failing to effect a sale, 
when he desires to do so, will usually be less. This at any rate 
applies to most standard trades. 

Since effective access to large markets implies a fairly large 
business, the economy of risk becomes one of the economies of 
capitaHsm, and its calculation a chief branch of the employer's 
skill. The watching of the market so as to reduce the waste of 
misdirected production is the most dehcate of the intellectual 
activities of most managers. It takes him outside the scope of 
his own business and the present process of production, to con- 
sider the whole condition of the trade in the present and the 
probable future. These calculations and acts of judgment issu- 
ing from the brain of business managers are the psychical aspect 



THE CREATIVE FACTOR IN PRODUCTION 59 

of the whole structure of markets and of the trade and traffic 
arrangements which give such unity and order as are visible in 
what is termed the industrial system. 

Thus, not merely on the financial but on the commercial side, 
industry is perceived to be a great fabric of beliefs and desires. 
Though, as we shall recognise, in dealing with labour, and with 
saving, risk-taking is by no means confined to employers and 
entrepreneurs, its wider operations belong to the speculative 
skill which comes under the general head of ability of manage- 
ment. In the psychological interpretation of industry this func- 
tion of the entrepreneur is of quite crucial significance, cooperat- 
ing everywhere with the more abstract calculations of financiers 
in directing the amounts, kinds, and directions, of the various 
currents of industrial energy which move in the business world. 
Since it involves a constant use of the constructive imagination 
in the interpretation of the play of changing motives in many 
minds, and the forecasting of future conditions which can never 
be a mere repetition of the past, the 'creative' faculty obtains 
here its highest expression. It is not for nothing that the great 
modern master either of finance or industry is accredited with 
some quality of imaginative power akin to that of the artist. 
This, however, must in not a few instances imply, not merely 
the genius of the prophet, but that of the skilled manipulator 
of economic material and opportunity, who helps to secure the 
due fulfilment of the prophecies upon which he stakes his faith. 



CHAPTER V 

THE HUMAN COSTS OF LABOUR 

§ I. The classical PoKtical Economy of this country gave to 
Labour a role of supreme importance in the production of wealth. 
From Adam Smith, Ricardo, and other authoritative exponents 
of the new 'science' many passages can be cited to support the 
thesis that labourers are the only producers. Nor does it appear 
that in these utterances Labour was usually intended to include 
the services of organisation and management or other intellect- 
ual activities. Wealth is baldly attributed to Labour in the sense 
that the manual labour, which extracts raw materials from the 
earth, shapes and composes them, and carries them from one 
place to another, alone counts as a cost of production. It is 
natural enough that the scientific socialism of Europe should have 
accepted and enforced this doctrine. Though the more intelligent 
socialists and 'labour men' admit the necessary work of super- 
intendence and other mental work as useful and productive, the 
materiahsm prevalent in the business world tends to relegate to 
a quite secondary place all the higher forms of intellectual and 
moral activity. 

It was upon the whole, indeed, a sound instinct which thus led 
the early theorists to use language which attributed to manual 
labour the real burden of the 'costs' of production. For closer 
investigation attests the force of the distinction between the pro- 
ductive energy given out by the intellectual, the directing, and 
administrative classes on the one hand, and by the labouring- 
classes on the other. Moreover, the social as well as the eco- 
nomic cleavage is so distinctive a feature of our life that it would 
be inconvenient to ignore it. The cleavage will be found to 
correspond pretty accurately to the distinction between the 
creative and the imitative functions which we provisionally 
adopted for a starting point in our analysis. 

60 



THE HUMAN COSTS OF LABOUR 6i 

For most of the productive energy given out by the artistic, 
inventive, professional, official, and managerial classes, which 
have passed under our survey, is seen to be in large measure crea- 
tive, varied, interesting, and pleasurable. 

Now in the labour of the wage-earning classes these qualities 
are generally lacking. Alike in motives and in methods, the con- 
trast is clearly marked. The mind of the artist or the inventor, 
even of the professional man or the administrator, is occupied 
with the work in hand, as an object of interest and of desirable 
achievement. The nature of the work and the conditions of re- 
muneration conduce to fix his immediate thoughts and feelings 
on the performance of his work. With the labourer it is different. 
The conditions of most labour are such that the labourer finds 
little scope for thought and emotional interest in the work itself. 
Its due performance is hardly an end to him, but only a means 
to a livelihood consisting in the consumable commodities got in 
payment for his labour. 

But the vital distinction is in the nature and method of the 
work done. Whereas the artistic or inventive, or even the pro- 
fessional man, is constantly doing something new, the labourer 
continually repeats the same act or set of acts, in order to produce 
a number of similar products. The success of most labour con- 
sists in the exactitude and pace with which this repetition can 
be carried on. The machine-tender is the typical instance. To 
feed the same machinery with the same quantity of the same 
material at the same pace, so as to turn out an endless number of 
precisely similar articles, is the absolute antithesis of art. It is 
often said that the man who feeds such a machine tends to be- 
come as automatic as the machine itself. This, however, is but a 
half-truth. If the tender could become as automatic as the ma- 
chine he tended, if he could completely mechanise a little section 
of his faculties, it might go easier with him. But the main trend 
of life in the man fights against the mechanising tendency of his 
work, and this struggle entails a heavy cost. For his machine im- 
poses a repetition of the same muscular and nervous action upon 
a being whose muscles and nervous resources are continually 
changing. The machine, fed constantly with the same supply of 
fuel, geared up to a single constant pace of movement, forced by 



62 WORK AND WEALTH 

unchanging structure to the performance of the same operation, 
friction and error reduced to an almost negligible minimum, works 
through the longest day with a uniform expenditure of power. 
The machine- tender is an organism, fed at somewhat irregular 
intervals with different amounts and sorts of food, the assimila- 
tion of which is also discontinuous, and incapable of maintaining 
intact and constant in its quantity the muscular and nervous 
tissue and the accompanying contractions which constitute the 
physical supply of 'work'. This organism has also many other 
structures and functions, physical and mental, whose activities 
and needs get in the way of the automatic activity of machine- 
tending. Thus the worker cannot succeed in becoming alto- 
gether a machine-tending automaton. He will not always ex- 
actly repeat himself, and his attempt to do so involves two sets 
of organic costs or wastes, due to the fact that, though his labour 
tries to make him a specialised mechanism, he remains a general- 
ised organism. 

So far as labour consists in specialised routine, absorbing the 
main current of productive energy, it is the enemy of organic 
J health. It is hostile in two ways, first, in denying to man op- 
portunity for the exercise of his other productive faculties, sec- 
ondly, in overtaxing and degrading by servile repetition the 
single faculty that is employed. 

As the artist presents the supreme example of creative work, 

with a minimum of human costs and a maximum of human 

J utility, so the machine-tender presents the supreme example of 

imitative work, with a maximum of human costs and a minimum 

of human utility. 

§ 2. Some particular consideration of these costs of machine- 
tending will be the best approach to a more general survey of 
the human costs of labour. 

The indictment of the dominion of machinery by Ruskin, 
Morris, and other humanist reformers, was primarily based upon 
the degradation of the worker's manhood by denying him the 
conditions of good work. 'It is a sad account,' said Ruskin, 
' for a man to give of himself that he has spent his life in opening 
a valve, and never made anything but the eighteenth part of a 
pin.' But, important as is this charge of degraded and joyless 



THE HUMAN COSTS OF LABOUR 63 

work, we must begin our analysis of the costs of mechanical or 
factory labour at a lower level. 

From the great body of the factory labour which goes to the 
provision of our national income, the first great human cost that 
emerges is the burden of injurious fatigue which results from 
muscular or nervous overstrain, and from the other physical and 
moral injuries which are the natural accompaniments of this 
overstrain. 

Modern physiology and pathology have done much to give 
plain meanings to these costs. Physical fatigue is not of necessity 
an injury to the body, nor is all feehng of fatigue a pain. The 
ideally correct conduct of the organism may, indeed, appear to 
preserve an exact and a continuous balance between the anabolic 
and the catabolic, the nutrition of cell life and the expenditure in 
function. Sir Michael Foster gives the following classical descrip- 
tion of this process.^ 

'Did we possess some optic aid which should overcome the 
grossness of our vision, so that we might watch the dance of atoms 
in this double process of making and unmaking in the human 
body, we should see the commonplace living things which are 
brought by the blood, and which we call the food, caught up into 
and made part of the molecular whorls of the living muscle, 
linked together for awhile in the intricate figures of the dance of 
life; and then we should see how, loosing hands, they slipped back 
into the blood, as dead, inert, used-up matter. In every tiny 
block of muscle there is a part which is really ahve, there are parts 
which are becoming alive, there are parts which have been alive 
but are now dying or dead ; there is an upward rush from the life- 
less to the living, a downward rush from the living to the dead. 
This is always going on, whether the muscle be quiet and at rest, 
or whether it be active and moving. Some of the capital of living 
material is always being spent, changed into dead waste, some of 
the new food is always being raised into living capital. 

'Thus nutritive materials are carried by the blood to the 
tissues, and the dead materials of used-up and broken-up tissues 
are carried away for destruction or ejection. Under normal con- 
ditions of healthy activity this metabohc balance is preserved 
^ Weariness, the Rede Lecture, Cambridge, 1893. 



64 WORK AND WEALTH 

by the alternation of work and repose, the tissue and energy built 
up out of food during periods of rest forming a fund for expendi- 
ture during periods of work, while the same periods of rest enable 
the destructive and evacuative processes to get rid of any accu- 
mulation of dead tissue due to the previous period of work. Ab- 
normally intense or unduly prolonged activity of any portion of 
the body uses up tissue so fast that its dead material cannot be 
got rid of at the proper pace. It accumulates in the blood or in 
the kidneys, liver or lungs, and operates as a poison throughout 
the whole system. Over-fatigue thus means poisoning the or- 
ganism. 

'The poisons are more and more heaped-up, poisoning the 
muscles, poisoning the brain, poisoning the heart, poisoning at 
last the blood itself, starting in the intricate machinery of the 
body new poisons in addition to themselves. The hunted hare, 
run to death, dies not because he is choked for want of breath, 
nor because his heart stands still, its store of energy having given 
out, but because a poisoned blood poisons his brain, poisons his 
whole body.' ^ 

The Itahan biologist Mosso has demonstrated that the depress- 
ing effect of fatigue is not confined to the local centre where it is 
produced, but is carried to all parts of the body. When the blood 
of a dog fatigued by continued running is injected into the vessels 
of a sound dog, the latter exhibits all the signs of fatigue. The 
inabihty of the system to dispose of the used-up tissue, which 
thus accumulates and poisons the system, is one injurious factor 
in fatigue. Another is the undue depletion of the stores of gly- 
cogen and oxygen, which the organism provides for the output 
of muscular activity. Glycogen is a compound of carbon, hydro- 
gen, and oxygen made by muscle tissue out of the sugar or dex- 
trine supplied to it by the blood. 'The stored glycogen of the 
muscles keeps uniting chemically with the oxygen of the blood. 
The glycogen is broken down into a simpler chemical form, giv- 
ing off the gas carbon dioxide and other acid wastes, and releasing 
heat and mechanical energy in the process. With the released 
energy contraction of the muscles takes place and hence ulti- 
mately the industrial labour which is our special theme.' ^ 

^ Foster. Op. cit. ^ Goldmarck, Fatigue and Efficiency, p. 22. 



THE HUMAN COSTS OF LABOUR 65 

'Glycogen is, as it were, stored for use. It is always being 
replenished, always being depleted. . . . But when the muscle is 
active and contracts energetically, there is a run upon our gly- 
cogen. It is used up faster than it is built in muscle. The glyco- 
gen is spent so rapidly that there is not time for the blood-stream 
to bring back to the tissue the potential material for its repair.' ^ 
Though the liver furnishes an extra store of glycogen, this too 
may be depleted by undue muscular activity. 

'Thus we have reached the other fundamental factor in fa- 
tigue — the consumption of the energy-yielding substance itself. 
Not only does tissue manufacture poison for itself in the very act 
of living, casting off chemical wastes into the circHng blood- 
stream; not only are these wastes poured into the blood faster 
with increased exertion, clogging the muscle more and more with 
its own noxious products; but, finally, there is a depletion of the 
very material from which energy is obtained. The cataboHc proc- 
ess is in excess of the anabohc. In exhaustion, the organism is 
forced literally to "use itself up".' ^ 

§ 3. So much for the physiological meaning of muscular fa- 
tigue. Closely associated with muscular fatigue is nervous fa- 
tigue. For every voluntary muscular action receives its stimulus 
from a nervous centre. Though the nature of this nervous energy, 
accumulated in the central nervous system and distributed in 
stimuli, is not well understood, its economy is gravely disturbed 
by conduct involving heavy muscular fatigue, as well as by work 
of a mental kind involving heavy drains on its resources. A pro- 
cess of building up, storage, and dissipation of nerve tissue and 
energy-yielding material, corresponding to that which we have 
traced for muscle tissue, must be accepted as taking place. Fa- 
tigue of the nervous system will thus be attended by a similar 
accumulation of poisonous waste products, and an excessive con- 
sumption of substances needed for the maintenance of nervous 
activity. 

Though physiologists are not agreed as to how and when 
fatigue acts on the nervous cells, there is no question of the real- 
ity and of the importance of this injury of excessive work to 
' the administrative instrument of the individual ' which ' directs, 

^ Goldmarck, p. 22. ^ Ibid, p. 23. 



66 WORK AND WEALTH 

controls and harmonises the work of the parts of the organic 
machine and gives unity to the whole.' 

Still confining our attention to purely physical conditions, we 
learn that work done in a state of muscular fatigue involves an 
increase of nervous effort. 

'Mosso showed that a much stronger electric stimulus is re- 
quired to make a wearied muscle contract than one which is 
rested. He devised an apparatus, the ponometer, which records 
the curve of nervous effort required to accomplish muscular ac- 
tion as fatigue increases. He showed that the nerve centres 
are compelled to supply an ever stronger stimulus to fatigued 
muscles.' ^ 

Professor Treves at Turin throws further light upon the rela- 
tions between the muscular and the nervous economy. It is well 
known that in muscular activity there is an opening period dur- 
ing which efficiency, or practical response to nervous stimulus, 
increases. Before fatigue begins to set in, the muscle appears to 
gain strength, its working power being actually augmented. This 
period of maximum efficiency continues for an appreciable time, 
then fatigue advances more and more until muscular contraction 
refuses any longer to respond to even a heightened nervous stim- 
ulus. This, of course, is also an epitome of the course of organic 
life itself, its rise towards maturity, its level of maximum power 
and its decline. 

Now training or practice can notoriously affect this natural 
economy. The muscular system, or some part of it, can by prac- 
tice accommodate itself to increasing quantities of fatigue-poisons, 
and can draw from the general organic fund a larger quantity of 
material for repair of local muscular tissue and energy. But it 
has long been recognised that some real dangers attach to this 
excessive specialisation of muscular activities. The pathological 
nature of over-training in athletics has its plain counterpart in 
industry. This, according to Professor Treves, lies in the failure 
of the supply of nervous energy to rise in proportion to the re- 
quirements for this higher pressure upon the muscular tissues. 

'According to my experience, it has not been found that train- 
ing has as favourable an effect upon [nervous] energy as upon 

^ Goldmarck, p. S3- 



THE HUMAN COSTS OF LABOUR 67 

muscular strength. . . . This fact explains why muscular 
training cannot go beyond certain Hmits and why athletes are 
often broken down by the consequences of over-exertion. And 
this fact teaches also the practical necessity of preventing women, 
children, and even adult men from becoming subjected to labour, 
which, indeed, a gradual muscular training may make possible, 
but at the price of an excessive loss of nervous energy which is 
not betrayed by any obvious or immediate symptoms, either ob- 
jective or subjective.' ^ 

A series of experiments has been directed to the more detailed 
study of the relations between activity and repose. Their general 
result is to prove that muscular work, done after fatigue has set 
in, not only costs more nervous eflort but accomplishes less work. 
The ergograph, an instrument for measuring work, yields ample 
testimony to the recuperative effect of rest taken before exhaus- 
tion is reached, on the one hand, and the rapid rate of decline in 
achievement when activity is continued after the fatigue point 
has been reached. 

§ 4. To this account of the physical costs of excessive work in 
muscular and nervous waste must be added the greater liability 
to accidents and the greater susceptibility to industrial and non- 
industrial diseases which fatigue entails. 

The statistics of industry in various countries prove that fa- 
tigue is a very important factor in industrial accidents. Though 
fatigue is not always proportionate to duration of work, the num- 
ber of hours worked without intermission is usually a valid index 
of fatigue. After a long stunt of work the attention of the worker 
and his muscular control are both weakened. We find, therefore, 
a marked similarity in the curves relating accidents to hours of 
labour, accidents increasing progressively up to the end of the 
morning's work, and again in the late afternoon as the day's 
work draws to its close. Recent German statistics show that the 
highest rate of accidents is during the fourth and fifth hours of 
morning work. 

That over-fatigue connected with industry is responsible for 
large numbers of nervous disorders is, of course, generally ad- 
mitted. The growing prevalence of cardiac neurosis and of neu- 

^ Goldmarck, p. 37. 



68 



WORK AND WEALTH 



rasthenia in general among working-people is attested by many 
medical authorities, especially in occupations where long strains 
of attention are involved. But the general enfeeblement and 

13 



■c 9 



S 8 
c 
•S 7 



a. 











j^ 




















/ 


/"'\ 












y 








/ 














/ 






J 








\ 








/ 




r 










V 


/- 




J 






















v 




y 


1 




















/ 






















/ 




Percentage of persons killed or Injured 
in 1907 grouped according to the number 
of hours the inju red person had been af 










work 
(( 


on day of accident 

Total Accidents 79,7 
'lerman Insurance Repor 


91 
i-s) 











































































to oS 



J-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 
Numberof Hours Worked 



9-10 10-11 



loss of resistance power to disease germs of all kinds are even 
more injurious consequences of over-exertion. Many experi- 
ments attest the fact that fatigue reduces the power of the blood 
to resist bacteria and their toxic products. 
§ 5. So far I have dwelt exclusively upon the physiological 



THE HUMAN COSTS OF LABOUR 



69 



nature and effects of fatigue as costs of labour. But due account 
must also be taken of the psychical or conscious costs. Much 
work in its initial stage contains elements of pleasurable exercise 
of some human organ or faculty, and even when this pleasure has 
worn off a considerable period of indifference may ensue. Though 



1 i> 

1 ? 


























! 1 




















































10 


1 


\ 


q 


























8 










1 










r 




-\ 


7 








1 




\ 






1 








f, 








/ 










/ 








'^ 




^ 


y 










/ 


f 








/\ 




r 










\ "^ 


/ 










^ 


/ 
























2 


/ 






1 1 1 

Percerrtage Accidents byfi 
Hourofi-heDay 


le 








1 








( Oej 


-man t 


'nsura 
1910 


'ncem 


^porT^ 


>) 








n 



























6-7 7-8 8-9 



9-/0 lO-II 11-12 12-1 
Time of Doy 



1-2 2-3 3-4 4-5 5-6 



boredom may set in before any strain of fatigue, the earlier period 
of ennui may not entail a heavy cost. But, when fatigue ad- 
vances, the irksomeness brings a growing feeling of painful ef- 
fort, and a long bout of fatigue produces as its concomitant a 
period of grave conscious irritation of nerves with a subsequent 
period of painful collapse. Where the conditions of work are 



70 WORK AND WEALTH 

such as to involve a daily repetition of this pain, its accumulative 
effect constitutes one of the heaviest of human costs, a lowering 
of mentahty and of moral resistance closely corresponding to the 
decline of physical resistance. Drink and other sensational ex- 
cesses are the normal reactions of this lowered morale. Thus 
fatigue ranks as a main determinant of the 'character' of the 
working-classes and has a social significance in its bearing upon 
order and progress not less important than its influence upon the 
individual organism. 

§ 6. I have dwelt in some detail upon these phenomena of fa- 
tigue, because they exhibit most clearly the defects of the work- 
ing life which carry heaviest human costs. These defects are 
excessive duration of labour, excessive specialisation, excessive 
repetition, excessive strain and excessive speed. Though sepa- 
rate for purposes of analysis, these factors closely interact. Mere 
duration of labour does not necessarily involve fatigue, provided 
it carries the elements of interest, variety, and achievement. The 
degree of specialisation or subdivision of labour counts on the 
whole more heavily. But even a high degree of speciaHsation is 
alleviated, where it contains many little changes of action or posi- 
tion, and affords scope for the satisfaction attending expert skill. 
It is the constant repetition of an identical action at a prescribed 
pace that brings the heaviest burden of monotony. 

It is upon this combination of conditions that the first count 
against the dominion of machinery is based. The brief physiolog- 
ical consideration we have brought to bear upon the problem of 
fatigue gives clearer significance to monotony as a 'cost'. It im- 
pHes, not merely a dull and distasteful occupation, but one which, 
taxing continually the same muscles and the same nerve-centres, 
increases the poison of fatigue. Hand labour of a narrow order, 
or machine-tending however light, entails this heavy cost, if 
maintained over a long period of time. 

But where monotonous repetition is closely directed by the 
action of a machine, as regards its manner and its pace, there is 
a special nervous cost. For a hand-worker, however dull or 
heavy is the work, retains some slight power of varying the pace 
and perhaps of changing his position or mode of work. A worker 
who either feeds a machine or adjusts his movements in obedience 



THE HUMAN COSTS OF LABOUR 71 

to those of a machine, as for instance a cutter in the clothing 
trade or in shoemaking, has no such hberty. The special cost 
here entailed is that of trying to make an organism conform in its 
movements to a mechanism. Now a human being, or any other 
organism, has certain natural rhythms of movement for work, 
related to the rhythms of heart and lungs and other organic pro- 
cesses, and there are natural limits also to the pace at which he 
can efficiently, or even possibly, continue working. A machine 
also has rhythms and a maximum efficiency pace. But the 
rhythms of a machine are determined by its mechanical con- 
struction and the apparatus which furnishes its power: they are 
continuously uniform, and are capable of being speeded up be- 
yond the capacity of the human tender. 

A human rhythm is really labour-saving, in as much as it eases 
the strain to work in accordance with a natural swing. To set 
a man to follow the rhythm of a machine not only loses this econ- 
omy, but entails an extra effort of conformity. The tendency to 
speed up a machine, so as to get the most out of it, is Hable to 
take out of the machine-tender even more than he is capable of 
recognising in the way of nervous strain. Where considerable 
muscular activity is also required in following a high pace set 
by a machine, an appalHng burden of human costs may be ac- 
cumulated in a factory day. 

When to such direct human costs of labour are added the risks 
of industrial accident or of industrial diseases, the physical in- 
juries involved in bad atmosphere, heat, noise and other inci- 
dental pains and inconveniences which beset many branches of 
industry, we begin to realise with more distinctness the meaning 
of 'costs of labour' in the human as distinguished from the eco- 
nomic sense. 

Later on we shall turn to consider how far the economic or 
monetary 'costs' correspond with these human costs. 

Our present task, however, is to conduct a brief survey of gen- 
eral industry in order to form some idea of the magnitude of these 
human costs in the leading branches of production, and to con- 
sider how far they are offset or quahfied by factors of human in- 
terest or utiHty, such as we found widely prevalent in the work 
of the artistic, official, and administrative classes. 



CHAPTER VI 

THE REIGN OF THE MACHINE 

§ I. If it were true that all the labour of the wage-earning 
classes which went to produce the real national income were, 
or tended to become, monotonous and highly speciahsed machine 
tending, the workers constantly engaged in close repetition of 
some single narrow automatic process, contributing to some 
final composite product whose form and utihty had no real mean- 
ing for them, the tale of human costs would be appalling. 

Fortunately this is not the whole truth about labour. Even 
the charge against machinery of mechanising the worker is fre- 
quently overstated. The only productive work that is entirely 
automatic is done by machines. For the main trend of the de- 
velopment of industrial machinery has been to set non-human 
tools and power to undertake work which man could not execute 
with the required regularity, exactitude, or pace, by reason of 
certain organic deficiencies. While, then, the sub-divided labour 
in most staple industries is mostly of a narrowly prescribed and 
routine character, it is hardly ever so completely uniform and 
repetitive as that done by a machine. Purely routine work, de- 
manding no human skill or judgment is nearly always under- 
taken by machinery, except where human labour can be bought 
so cheap that it does not pay to invent and apply machinery so 
as to secure some slightly increased regularity or pace of output. 
Where, then, as in most modern factories, human labour coop- 
erates with, tends and feeds machinery, this human labour is of 
a less purely repetitive character than the work done by the 
machines. Some portions of the labour, at any rate, contain ele- 
ments of skill or judgment, and are not entirely uniform. 

We can in fact distinguish many kinds and grades of human 
cooperation with machinery. In some of them man is the ha- 
bitual servant, in others the habitual master of the machine; in 
others, again, the relation is more indirect or incidental. Though 

72 



THE REIGN OF THE MACHINE 73 

an increasing number of the processes in the making and moving 
of most forms of material goods involves the use of machinery 
and power, they do not involve, as is sometimes supposed, the 
employment of a growing proportion of the workers in the merely 
routine labour of tending the machines. Such a supposition, 
indeed, is inconsistent with the primary economy of machinery, 
the so-called labour-saving property. It might, indeed, be the 
case that the machine economy was accompanied by so vast an 
increase of demand for machine-made goods, that the quantity 
of labour required for tending the machines was greater than 
that formerly required for making by hand the smaller quantity. 
In some trades this is no doubt so, as for instance in the print- 
ing trade, and in some branches of textile industry where the 
home market is largely supplemented by export trade. But the 
displacement of machine-tenders by automatic machines is ad- 
vancing in many of the highly-developed machine industries. 
The modern flour or paper mill, for instance, performs nearly all 
its feeding processes by mechanical means while in the textile 
trade automatic spindles and looms have reduced the number and 
changed the character of the work of minders. More and more 
of this work means bringing human elements of skill and judg- 
ment and responsibility to bear in adjusting or correcting the 
irregularities or errors in the operations of machinery. Machines 
are liable to run down, become clogged, break, or otherwise 'go 
wrong'. These errors they can often be made to announce by 
automatic signals, but human care is needed for their correction. 
This work, however monotonous and fatiguing to muscles or 
nerves, is not and cannot be entirely repetitive. 

In many other processes where the machine is said to do the 
work, human skill and practice are required to set and to regulate 
the operations of the machine. The use of automatic lathes is an 
instance of cooperation in which some scope for human judgment 
remains. The metal and engineering trades are full of such in- 
stances. Though machinery is an exceedingly important and in 
many processes a governing factor, it cannot be said to reduce 
the labour that works with it to its own automatic level. On the 
contrary, it may be taken as generally true that, in the processes 
where machinery has reached its most complex development, an 



74 WORK AND WEALTH 

increased share of the labour employed in close connection with 
the machinery is that of the skilled engineer or fitter rather than 
of the mere tender. The heaviest and the most costly labour in 
these trades is usually found in the processes where it has not 
been found practicable or economical to apply machinery. In- 
deed, the general tendency, especially noticed in America, in the 
metal trades, has been to substitute for a large employment of 
skilled hand labour of a narrowly specialised order, a small em- 
ployment of more skilled and responsible supervisors of machin- 
ery and a large employment of low-skilled manual labour in the 
less mechanical departments, such as furnace work and other 
operations preparatory to the machine processes. 

§ 2. Though accurate statistics are not available, it appears 
that in this country the proportion of the working population 
employed in manufactures is not increasing, and it is more than 
probable that an exact analysis of the nature of the work of 
our factories and workshops would show that the proportion 
engaged in direct attendance on machinery was steadily fall- 
ing. 

For even in manufacture, the department of industry where 
machine processes have made most advance, there are many 
processes where hand labour is still required, in sorting and pre- 
paring materials for machinery, in performing minor processes 
of trimming or decoration, in putting together parts or in pack- 
ing, etc. Where female labour is employed, a very large propor- 
tion of it will be found to be engaged in such processes outside 
the direct dominion of machinery. Though most of the distinc- 
tively human 'costs' of machine processes, the long hours, high 
pace, monotony of muscles and nerve strain, are usually present 
in such work, it is not absolutely mechanical, some slight ele- 
ments of skill and volitional direction being present. 

There are other restrictions upon the purely repetitive or 
routine character of manufacture. There is much work which 
no machine can be invented to do because of certain inherent 
elements of irregularity. Most of these are related to the organic 
nature of some of the materials used. Where expensive animal 
or vegetable products require treatment, their natural inequali- 
ties often render a purely mechanical operation impossible or 



THE REIGN OF THE MACHINE 75 

wasteful. The killing, cutting, and canning processes in the meat 
trade, the picking, preparation and packing of fruit, many pro- 
cesses in the tanning and leather trade, the finer sorts of cabinet- 
making, are examples of this unadaptability of organic materials 
to purely mechanical treatment. Where very valuable inor- 
ganic materials are used in making high-grade products, similar 
limitations in the machine economy exist. The finest jewellery 
and watch-maldng still require the skill and judgment of the 
practised human hand and eye. Some of the irregularities in 
such processes are, indeed, so small and so uninteresting as to 
afford little, if any, abatement of human costs; but they remove 
the labour from the direct control of a machine. 

A mxOre important irregularity which restricts macliinery in 
manufacture exists where the personal needs or taste of the con- 
sumer help to determine the nature of the process and the prod- 
uct. Here again we are confronted by the antagonism of mech- 
anism and organism. For the true demand of consumers is the 
highest expression of the uniqueness which distinguishes the or- 
ganic. As no two consumers are exactly identical in size, shape, 
physical or mental capacities, tastes and needs, the goods re- 
quired for their consumption should exhibit similar differences. 
Macliine economy cannot properly meet this requirement. It 
can only deal with consumers so far as their human nature is com- 
mon: it cannot supply the needs of their individuahty. So far 
as they are willing to sink their differences, consenting to con- 
sume large quantities of goods of identical shapes, sizes and qual- 
ities, the machine can supply them. But since no two consumers 
are really identical in needs and tastes, or remain quite constant 
in their needs and tastes, the fundamental assumption of routine- 
economy is opposed to the human facts. 

Consumers who refuse to sink their individuality and are 
'particular' in the sort of clothes they wear, the sort of houses 
and furniture and other goods they will consent to buy, exercise 
a power antagonistic to routine labour. They demand that pro- 
ducers shall put out the technical skill, the care, taste and judg- 
ment required to satisfy their feelings as consumers. That is to 
say, they demand the labour not of the routine-worker but of the 
craftsman, work which, though not creative in the full free ar- 



76 WORK AND WEALTH 

tistic sense, contains distinct elements of human interest and ini- 
tiative. 

§ 3. The presence and the possibilities of this individuality 
of labour, flowing from the educated individuality of consumers, 
are a most important influence in the lightening of the human 
costs of labour. At present no doubt a very small proportion of 
the material goods turned out by the industrial system contains 
any appreciable element of this individuahty of workmanship. 
It may, indeed, well appear that our recent course during the 
development of the machine economy has been a retrograde one. 
In the beginnings of industry it appeared as if there were more 
scope for the producer's self-expression, more joy of work, more 
interest in the product, even though destined for the commonest 
uses. The guilds in the Middle Ages preserved not a little of this 
happier spirit of craftsmanship. To those who brood upon these 
visions of the past, our modern industrial development has often 
seemed a crude substitution of quantity of goods for quality, 
the character of labour deteriorating in the process. With the ele- 
ment of truth in such a judgment is mingled much falsehood. 
There has never been an age or a country where the great bulk 
of labour was not toilsome, painful, monotonous, and uninter- 
esting, often degrading in its conditions. Bad as things are, 
when regarded from the standpoint of a human ideal, they are 
better for the majority of the workers in this and in other ad- 
vanced industrial countries than ever in the past, so far as we 
can reconstruct and understand that past. Machinery has ren- 
dered a great human service by taking over large masses of 
heavy, dull, and degrading work. When fully developed and 
harnessed to the social service of man, it should prove to be the 
great liberator of his free productive tastes and faculties, per- 
forming for him the routine processes of industry so that he may 
have time and energy to devote himself to activities more inter- 
esting and varied. 

The uniqueness of the individual consumer has only begun to 
make its impression upon industry. For it needs Kberty and 
education for a man to recognise this property of organic unique- 
ness and to insist on realising it. The first movements of con- 
scious tastes in a nation or a class are largely imitative, taking 



THE REIGN OF THE MACHINE 77 

shape in fashions sufficiently wide-spread and uniform to lend 
themselves to routine mechanical production. The self-assertion 
of the individual is a slower fruit of culture. But, as it grows, 
it will offer a continually stronger opposition to the dominion 
of mechanical production. It will do this in two ways. In the 
first place, it will cause a larger proportion of demand to be di- 
rected to the classes of products, such as intellectual, aesthetic, 
and personal services, which are by their nature less susceptible 
of mechanical production. In the second place, weakening the 
traditional and the imitative factors in taste and demand, it 
will cause consumption, even of the higher forms of material com- 
modities, to be a more accurate expression of the changing needs 
and tastes of the individual, stamping upon the processes of pro- 
duction the same impress of individuality. 

But though the direct control of machinery over human labour 
is obstructed in the earlier extractive processes by the refractory 
uneven nature of materials, and in the final processes by the 
nature and particular requirements of consumers, its influence 
extends far beyond the middle processes of manufacture where its 
prominence is greatest. Power-driven machinery plays a larger 
part in agriculture every year: mining is the first of machine in- 
dustries in the sense that it employs the largest amount of horse- 
power per man; the transport trade by sea and land is mechan- 
ised even in its minor local branches; the great pubhc services, 
supplying fight, water, and other common wants, are among the 
largest users of power-driven machinery; the greatest of our ma- 
terial industries which still depends mainly upon hand labour, 
the building and road-making group, is constantly increasing its 
dependence on machinery for its heavier carrying work and for 
the preparation of the metal, stone and woodwork it employs. 
When we add the growth of new large manufactures, such as 
chemicals and electrical apparatus, the enormous expansion of 
the paper and printing trades under the new mechanical con- 
ditions, the recent transference of the processes of the prepara- 
tion of foods and drinks and laundry work from the private 
house to the factory, we shall recognise that the net influence 
of machinery, as determining the character of human labour, is 
still advancing with considerable rapidity. 



78 WORK AND WEALTH 

§ 4. It is not easy to answer the two related questions, ' How 
far is machinery the master, how far the servant, of the workers 
who cooperate with it?' 'How far does machinery aggravate, 
how far Hghten the human costs of labour? ' Even when we com- 
pare the work of the classes most subservient to machinery, 
the feeders and tenders in our factories, with the domestic or 
earlier factory processes under hand labour, it is by no means 
self-evident that the net burden of the human costs has been en- 
hanced. For, though the spinning and weaving work before the 
industrial revolution had certain slight elements of freedom and 
variety now absent, many of the hygienic conditions were far 
worse, the hours of labour were usually longer, and the large em- 
ployment of old folk and tender children, in work nearly as un- 
varied as that enjoined by modern machinery, enslaved the en- 
tire life of the home and family to the narrow and precarious 
conditions of a small local trade. The real liberty of the worker, 
as regards his work, or its disposal in the market, was hardly 
greater than in the modern factory. 

In most of the great branches of production, machinery is 
rather an adjunct to labour than a director. The labourer in 
charge of the machine tends more to the type of the engineer 
than to that of the feeder or mere minder. Though the mining, 
metal, chemical, paper, food and drink manufactures contain 
large quantities of machinery, a large proportion of those who 
have to deal with the machines are skilled manual labourers. 
So in the transport trade, though the displacement of the old-time 
sailor by the engineer and stoker, of the horse-driver by the en- 
gine-driver and the motor-man, sometimes appears to involve a 
degradation of labour, the issue is a doubtful one, if all the pros 
and cons are taken into due account. As regards the employ- 
ment of machinery in the building and contracting trades, as in 
the mining, its first and obvious effect has been to relieve human 
labour from much of the heaviest muscular toil. Though most of 
such labour involves too slight elements of interest or skill greatly 
to alleviate the physical fatigue, it cannot be said that machinery 
has increased the burden. 



CHAPTER VII 

THE DISTRIBUTION OF HUMAN COSTS 

§ I. In endeavouring to estimate the human costs of labour 
in terms of physical wear and tear and the conscious pains and 
penalties entailed by the conditions under which many indus- 
trial processes are carried on, we have hitherto considered these 
costs as borne by workers, irrespective of age, sex, or other dis- 
criminations. But it is self-evident that a given strain upon 
muscles or nerves over a period of time will vary greatly, both 
in the organic cost and in the conscious pain which it entails, 
according to the strength and endurance, nervous structure, 
physical and moral sensitiveness, of the different sorts of work- 
ers. Indeed, a given output of productive energy will evidently 
entail a different human cost in every person called upon to 
give it out: for every difference of strength, skill, capacity and 
character must to some extent affect the organic burden of the 
task. 

In endeavouring, therefore, to relate the human to the eco- 
nomic costs of production of any quantity of material wealth or 
services, it would be necessary to consider how far the conditions 
of employment tend to economise human costs by distributing 
the burden proportionately to the power to bear it. The human 
wastes or excessive costs, entailed by conditions of employment 
which impose unequal burdens upon workers with equal capacity 
to bear them, or which distribute the burden unequally in time 
over the same set of workers, alternating slack periods with 
periods of excessive over-time, are obvious. Unfortunately the 
operation of our industrial system has not hitherto taken these 
into sufficient account. Though the physical, moral and social 
injuries, due to alternating periods of over and under work, are 
generally admitted, the full costs of such irregularity, human and 
even economic, are far from being adequately realised. While 
some attempts at ' decasualisation ' are being made, the larger 

79 



8o WORK AND WEALTH 

and more wasteful irregularities of seasonal and cyclical fluctua- 
tions are still regarded as irremediable. By the workers them- 
selves and even by social reformers, the injury inflicted upon 
wages and the standard of living by irregularity of employment 
is appreciated far more adequately than the related injury in- 
flicted on the physique and morale of the worker by sandwiching 
periods of over-exertion between intervals of idleness. 

This brief survey, however, is no place for a discussion of the 
causes and remedies of irregular employment. It must suffice 
to note that over a large number of the fields of industry the ex- 
cesses and defects of such irregularity prevail to an extent which 
adds greatly to the total human cost of the products. So far as 
our nation is concerned, there is no reason to hold that this waste 
is increasing. Evidence of hours of labour and of unemployment, 
indeed, appear to indicate that it is somewhat diminishing. But 
the unequal time-distribution of human costs must continue to 
rank as a great enhancement of the aggregate of such costs. 

§ 2. But not less injurious than the unequal treatment of 
equals, is the equal treatment of unequals. The bad human econ- 
omy of working immature children is a lesson which even the most 
' civilised ' nations have been exceedingly slow to learn. The bad 
human economy of working old persons of declining vigour, when 
able-bodied adult labour is available, is so far from being gener- 
ally recognised that employers are actually commended on the 
ground of humanity for keeping at labour their aged employees, 
when younger and stronger workers are available. Fortunately, 
the larger provision for retiring pensions attests the growing 
recognition of this aggravation of the human costs of industry. 
In both cases alike, the employment of the young and of the old, 
the error arises from a short-sighted view of the interests of the 
single person or his single family, instead of a far-sighted view 
of the welfare of the community. It is often a source of imme- 
diate gain to a working-class family to put the children out to 
wage-earning as early as possible, and to keep old people working 
as long as they can get work to do. It does not pay the nation, 
even in the economic sense, that either of these things should be 
done. The case of child-labour is, of course, the more serious, 
in that it evidently entails not merely a wasteful strain upon 



THE DISTRIBUTION OF HUMAN COSTS 8i 

feeble organisms, but an even heavier future cost in stunted 
growth and impaired efficiency throughout an entire life. 

When the play of current economic forces places upon women 
work which men could perform more easily, or creates women's 
industries with conditions of labour involving excessive strains 
upon the organism, the double human costs are even heavier. 
For if excessive fatigue or nervous strain affects a woman as 
worker, the injurious costs are likely to be continued and en- 
hanced through her capacity for motherhood. To use up or 
damage its women by setting them to hard wage labour in mill 
and workshop is probably the greatest human waste a nation 
could practise or permit. For some of the prevailing tendencies 
of modern industrialism appear to be more ' costly ' in their bear- 
ing upon women than on men. In regard to factory work, and 
all other industrial work involving a long continuous muscular 
or nervous strain, or, as in shop labour with its long hours of 
standing, medical authorities are unanimous in holding that wo- 
men suffer more than men.^ 'If a like amount of physical toil 
and effort be imposed on women, they suffer to a larger degree,' 
states Sir W. MacCormac- Statistics of employment from va- 
rious countries agree in showing that the amount of morbidity, 
as measured by the number of days lost by illness, is greater 
among working-women than among working-men, and that the 
mortality of working-women is greater than that of working- 
men, notwithstanding the fact that the average life of a female 
is longer than that of a male. Long hours and speeding-up of 
machinery thus evidently inflict graver organic costs on women 
than on men. Where piecework is in vogue, it furnishes a stronger 
stimulus to over- strain in women, because the general lowness of 
their wage gives a larger importance to each addition. 

§ 3. Thus in comparing the human costs of producing a given 
quantity of goods, due account must be taken of the distribution 
of the output of productive energy among workers of different 
sexes, and ages. The earlier tendency of the factory system 
in this country, the existing tendency in some countries, has been 

^ Cf. Goldmarck, Part II, pp. -126. 

2 Report of the Select Committee of the House of Lords on Early Closing in Shops, 
igoi. 



82 WORK AND WEALTH 

to impose a growing of monotonous and fatiguing labour upon 
women and children. At certain stages in the development of 
industrial machinery, this has been held to be a 'profitable' econ- 
omy, and in many processes of hand labour subsidiary to the 
factory system it still survives. Though legislation and other in- 
fluences have done much to check the worst injuries of child em- 
ployment in factories and workshops in more civiUsed communi- 
ties, a great amount of human cost is still incurred under this 
head. Child half-timers are still used in considerable numbers 
in textile factories, while the vast expansion of distributive work 
has sucked into premature wage-earning immense numbers of 
boys who ought to be at school. It is probable that the net ten- 
dency of British industry in recent years has been towards a 
slow reduction of the more injurious and 'costly' forms of female 
employment. Though an enormous number of females are en- 
gaged in work the hours and hygienic conditions of which escape 
legal regulation, probably a growing proportion of employed 
women come under an economy of shorter hours. The drudg- 
ery of domestic service engages a less number of women, while 
the opening of a larger variety of employments both in manu- 
facture and in commerce has somewhat improved their power 
to resist the excessive pressure of machine-conditions. The re- 
cent organised attack upon the 'sweated industries', however, 
reveals the fact that at the lower level of many trades a great 
mass of oppressive and injurious labour is extorted from working- 
women. Certain forms of new mechanical labour, not involving 
heavy muscular fatigue, but taxing severely the nervous system, 
are occupying a large number of women. The t3qDe-writer and 
the telephone have not yet been brought into conformity with 
the demands of health. Though machinery is generally bringing 
in its wake restrictions on hours of labour, the normal work-day 
of factory, office and shop still imposes a gravely excessive strain 
upon women employees. No small proportion of this excessive 
cost of women's work, however, is attributable to legal, profes- 
sional, or conventional restrictions, which, precluding women 
from entering many skilled and lucrative emplo3anents, compel 
them to compete in low-skilled and overstocked labour-markets. 
The social waste of such sex discrimination is two-fold. Even in 



THE DISTRIBUTION OF HUMAN COSTS 83 

trades and professions for which men have usually a greater apti- 
tude than women, some women can perform the work better and 
more easily than some men, and, if they are denied equal opportu- 
nity of access, the work is done worse or at a greater human cost. 
The refusal to admit women into the learned professions upon 
equal terms with men undoubtedly involves a loss to society of 
some of the finest service of the human intellect, while it en- 
trusts some of the skilled and responsible work, thus denied to 
women, to relatively ignorant and incompetent men. The other 
human cost is perhaps even heavier. For the excessive competi- 
tion, to which women are thus exposed in the occupations left 
to them, depresses the remuneration in most instances below 
the true level of physical efiiciency, induces or compels excessive 
hours of labour, breaks down the health of women-workers and 
injures their life. 

§ 4. This general survey shows that the human 'costs' of la- 
bour are closely associated in most cases with that subdivision 
and specialisation of activities which takes its extreme form in 
machine tending and which conforms most closely to mere ' repe- 
tition' as distinguished from the creative branches of produc- 
tion. But this identification of 'repetition' and human costs 
cannot be pressed into a general law. For reflection shows that 
repetition or routine does not always carry cost, and that on the 
other hand some labour which has considerable variety is very 
costly. Healthy organic life permits, indeed requires, a certain 
admixture of routine or repetition with its more creative func- 
tions. A certain amount of regular rhythmic exercise of the 
same muscles and nerve-centres yields vital utility and satisfac- 
tion. In some sports this exercise may be carried so far as to 
involve considerable elements of fatigue and endurance which 
are offset during their occurrence by the sense of personal prow- 
ess and the interest of achievement, This sentimental zest of 
endurance may notoriously be carried to extremes, injurious to 
the physical organism. Moreover, a certain amount of narrow 
physical routine often furnishes a relief element for the tired 
nerves or brain. Digging or knitting, though intolerable as a 
constant employment, may furnish by their very physical rou- 
tine an organic benefit when applied as a recreation. The same, 



84 WORK AND WEALTH 

indeed, is true of most other not too taxing forms of manual or 
mental routine labour, especially if they contain some obvious 
utility. Some slight element of skill seems needed for certain 
natures, but a bare uninteresting repetition commonly sufnces. 

Such considerations dispose of the assumption that all repeti- 
tion or routine in productive work is necessarily indicative of 
human cost and carries no organic utility or satisfaction. It is 
only when repetition is extended so as to engage too large a share 
of the time and energy of a human being that it involves a cost. 

So, on the other hand, it is not the case that all labour con- 
taining variety and opportunity for skill is costless and organ- 
ically good. Take for a notable example agricultural labour. 
Irregularity of soil and weather, the changes and chances of 
animal and vegetable life, the performance of many different 
processes, remove such work from the category of exact routine. 
Yet most of the labour connected with agriculture is, under the 
actual conditions of its performance, heavy, dull and joyless. In 
each process there is usually enough repetition and monotony 
to inflict fatigue, and the accumulation of separate fatigues in a 
long day's work, unalleviated by adequate personal interest in 
the process or its product, makes a heavy burden of cost. 

The same holds of other departments of industry where some 
inherent elements of skill and interest are found. The total bur- 
den of effort given out in a long day's work, continued week after 
week, year after year, under the conditions of wagedom, greatly 
outweighs these technical advantages. Duration and compul- 
sion cancel most, though not all, of the superiority of such work 
over machine tending, or clerking. A little labour in any of the 
handicrafts, in machine-running, the management of motor-cars 
or boats, in gardening and other modes of agriculture, serves as 
a pleasant pastime when undertaken as a voluntary and occa- 
sional employment. Make it regular, continuous, compulsory, 
and the enjoyment soon vanishes. The very elements of inter- 
est for the casual amateur often constitute the heaviest cost for 
the worker who lives by doing this and nothing else. Take motor- 
driving for an example. The quick exercise of nerve and muscle, 
the keenness of eye, wrist and attention, required to drive easily, 
quickly and safely, amid traffic or in a tangle of roads, gives 



THE DISTRIBUTION OF HUMAN COSTS 85 

nerve and interest to driving as a recreation. But this multipli- 
cation of little strains and risks, accumulating in a long day's 
work, and undertaken day after day, in all conditions of health, 
disposition and weather, soon passes from an agreeable and stim- 
ulating exercise into a toilsome drudgery. 

Consideration of the work in the distributive trades, whole- 
sale and retail, which absorb an ever-growing proportion of our 
wage-earners, is most instructive for understanding the respec- 
tive parts played by specialisation, duration, and compulsion in 
the human costs. Machinery has little direct control over the 
work of these clerks, warehousemen, shop-assistants, t3^ists, etc. : 
their work contains constant little elements of variety in detail, 
and a moderate amount of it imposes no fatigue. But the scope 
afforded for personal skill or achievement is insufficient; most of 
it is unmeaning and uninteresting so far as useful results are con- 
cerned; it involves constant obedience to the orders of another; 
and it is unduly prolonged. 

§ 5. We are now in a position to sum up the results of our gen- 
eral analysis of the human costs of labour, in which Tarde's dis- 
tinction between creation and imitation or repetition was our 
starting point. So far as the merely or mainly physical costs 
are concerned, the muscular and nervous strain and fatigue, 
excessive repetition is a true description of the chief cause. 
Machine tending at a high pace for a long working-day is in it- 
self the most ' costly ' type of labour, and, in so far as a machine 
controls the sort and pace of work done by a human being, these 
* costs' accumulate. But most work is not so directly controlled 
by machinery, and yet is so highly specialised that the routine 
constantly over-taxes with fatigue the muscles, nerves and atten- 
tion. The duration and pace of such labour are usually such as 
to heap up heavy costs of physical wear and tear and of physical 
discomforts. 

But the antithesis of creation and imitation or repetition has 
a different significance for the interpretation of physical costs. 
There it is not so much the absence of novelty involved in repe- 
tition, as the absence of personal liberty and spontaneity that 
counts most heavily. There are, in fact, few sorts of necessary 
productive labour which a man is not prepared to do for himself, 



86 WORK AND WEALTH 

with some measure of personal satisfaction, if he has within his 
own control the performance of this task and the result. But 
when another's will and purpose supersede his own, prescribing 
actions to be done under conditions of time, place and manner, 
determined by that other, this servitude to another's will is al- 
ways irksome and may be degrading. The human cost of most 
domestic service lies largely here. The work itself has more de- 
tailed variety and interest than most, and where the housewife 
herself does it, it often furnishes a net fund of human satisfaction. 
But the moral and intellectual costs of a hired servant, compelled 
to obey the arbitrary and capricious orders of a mistress, and to 
suppress her own will, tastes and incHnations in the execution 
of her task, are often very heavy. In a smaller degree this applies 
to all wage-earners engaged in any work where scope for their 
free volition is technically feasible. To substitute another's will 
for one's own, in matters where one has a will, is always a human 
cost. That cost, however, need not be great. When a worker 
is a unit of labour in some great business, his actions conforming 
to rules which, however troublesome, belong to the system, the 
consciousness of loss of hberty is far less than when the changing 
will of a personal employer operating amid the details of his work 
is the instrument of discipline. A shop-girl in a large business 
has a feeHng of greater independence than a domestic servant, 
a factory-hand than a shop-girl, while the low wage of home- 
workers is in part attributable to the removal of the worker from 
the immediate domination of the employer's will. 

§ 6. In assessing the psychical elements of cost, it is well to 
distinguish those related to a loss of liberty, or an encroachment 
upon personality, from those which are the conscious results or 
counterparts of the physical strains. For the enlargement of 
certain of these psychical costs is an exceedingly important factor 
in what is called 'industrial unrest'. This irksomeness of nar- 
rowly specialised labour and of the 'enslaving' conditions of the 
ordinary working life grows with the growth of intelligence and 
sensibility among the working-classes. Under the older order, 
of accepted class distinctions and economic status, implicit obe- 
dience to the employer's will carried no conscious moral cost. A 
new sense of personal dignity and value has now arisen in the 



THE DISTRIBUTION OF HUMAN COSTS 87 

better educated grades of workers which interferes with arbi- 
trary modes of discipHne. When they are called upon to do work 
in a way which appears to them foolish, injurious, or inequitable, 
a sense of resentment is aroused which smoulders through the 
working week as a moral cost. With every widening of education 
there comes, moreover, a discontent not merely with the particu- 
lar conditions of the labour, but with the whole system, or set 
of conditions, which addicts so large a proportion of their working 
hours and energies to the dull heavy task by which they earn 
their living. So too the narrow Umitation in the choice of work 
which the local speciahsation of industry involves, becomes a 
growing grievance. The ^conditions of labour' for themselves 
and others, taken as a whole, are realised as an invasion and a 
degradation of their humanity, offering neither stimulus nor 
opportunity for a man to throw 'himself into his work. For the 
work only calls for a fragment of that ' self ' and always the same 
fragment. So it is true that not only is labour divided but the 
labourer. And it is manifest that, so far as his organic human 
nature is concerned, its unused portions are destined to idleness, 
atrophy, and decay. 

This analysis of the conditions may seldom be fully realised 
in the consciousness of the worker. But education has gone far 
enough to make them real factors of working-class discontent. 
They constitute a large motive in the working-class movement 
which we may call the revolt of the producer against the exces- 
sive human costs of his production. 

This is the great and serious indictment against the economy 
of division of labour. Associated with it is the charge that the 
worker in one of these routine subdivided processes has no ap- 
preciation of the utihty or social meaning of his labour. He does 
not himself make anything that is an object of interest to him. 
His contribution to the long series of productive processes that 
go to turn out a commodity may be very valuable. But, as he 
cannot from his little angle perceive the cooperative unity of the 
productive series, it means nothing to his intelligence or heart. 

So not only does the performance of his task afford him no 
satisfaction, but its end or object is a matter of indifference to 
him. There is this vital difference between the carpenter who 



8S WORK AND WEALTH 

makes a cupboard or a door, fits it into its place and sees that it 
is good, and the bricklayer's labourer who merely mixes mortar 
and carries bricks upon a hod. A man who is not interested in 
his work, and does not recognise in it either beauty or utility, is 
degraded by that work, whether he knows it or not. When he 
comes to a clear consciousness of that degradation, the spiritual 
cost is greatly enhanced. It is true that specialisation in labour 
is socially useful, and that, if that speciahsation does not en- 
croach too largely upon the energy and personahty of the in- 
dividual worker, he is not injured but helped by the contribu- 
tion to social wealth which his special work enables him to make. 
Larger enlightenment as to the real meaning and value of his 
work, and the sense of social service which should follow, may 
indeed be expected to reduce considerably the irksomeness of 
its present incidence. But it can do so only upon tv/o conditions. 
In the first place, the duration and strain upon his physical and 
moral nature must be diminished. Secondly, the general con- 
ditions both of labour and of its remuneration must be such as 
to lead him to recognise that the discipline which it enjoins is 
conducive to a larger liberty, viz. that of willing cooperation 
with his fellows in the production of social welfare. As yet the 
attainment of these conditions has not kept pace with the new 
desires and aspirations which have grown so rapidly among the 
rank and file of workers in the advanced industrial countries. 
Hence a new burden of spiritual costs, expressing an increased 
divergence between conscious aspirations and the normal con- 
ditions of the worker's lot. The education of the town worker, 
the association with his fellows in large workshops, the life of 
the streets, the education of the school, the newspaper, the li- 
brary, the club, have made him increasingly sensitive to the 
narrowness and degradation of excessive routine in joyless labour. 



CHAPTER VIII 

HUMAN COSTS IN THE SUPPLY OF CAPITAL 

§ I . So far, in discussing the human ' costs ' of production, we 
have confined our attention to the activities of body and mind 
directly operative in producing marketable goods or services, 
grading them from the creative and generally 'costless' work 
of the artist and inventor to the repetitive and 'costly' work of 
the routine manual labourer. We now proceed to examine the 
human costs involved in the processes of providing the capital 
which cooperates with labour in the various productive opera- 
tions. The economic 'costs', for which payment is made out 
of the product to capital, are two, risk-taking and saving. What 
are the human costs involved in these economic costs? 

To clear the ground for this enquiry it will be well to begin by 
making plain the sense in which risk-taking and saving are 'pro- 
ductive' activities. Neither of them is 'work' in the ordinary 
organic sense of the application of muscle or nervous energy to 
the production of wealth. Both would rather be considered as 
activities of the human will and judgment which increase the 
ef&ciency of the directly productive operations. Their produc- 
tivity may thus be regarded as indirect. But it is none the less 
real and important on that account. For unless there was post- 
ponement of some consumption which might have taken place, 
and the application of the non-consumptive goods, which this 
postponement enabled to come into existence, to uses involving 
risks of loss, 'work' would be very unproductive in comparison 
with what it is. 

Risk-taking, the giving up of a present certain utility or sat- 
isfaction for the chance of a larger but less certain satisfaction 
in the future, is, we know, the essence of business enterprise. 
Such enterprise by no means always entails a human cost. In 
industry, as in all human functions, experiments, involving risk, 
are frequently a source of vital interest and of conscious satis- 

89 



90 WORK AND WEALTH 

faction. There are two roots of this satisfaction, the staking of 
one's judgment and skill in forecasting and determining future 
events, and the actual joy of hazard. The former is a common 
trait of intelligent personality, the latter a powerful, though less 
general motive, involving a ' sporting ' interest in Hf e. The spirit 
of adventure applied to business, enhances the conscious values. 
Whether it be motived by some physical restlessness or by some 
element of faith, it must be accounted an organic good, alike as 
means and end. If all the risk-taking involved in current in- 
dustry were of this nature, it would not then figure in our bill 
of human costs, but on the other side of the account. But where 
the conditions of actual business impose elements of risk that are 
either in kind or magnitude compulsory, not voluntary, not only 
does no satisfaction attend the taking of these risks, but consid- 
erable loss and suffering may accrue. Risks that are either great 
in themselves or great in relation to the capacity to bear them are 
frequently required by the conditions of modern business enter- 
prise. The men who undergo these risks do not deliberately or 
with express intention stake their faith and foresight on a game 
of gain or loss, or even enter into the risks with the gambler's 
zest. They undergo these risks because they cannot help them- 
selves, and the anxiety attendant on these risks is often one of the 
heaviest psychical and physical costs of the business man, 

§ 2. In analysing risk-taking as a special cost of capital, I must 
guard against one misunderstanding. Risk-taking, of both sorts, 
humanly good and humanly bad, is not of course by any means 
confined to administration of capital. Everyone who, either by 
choice or by the necessity of his situation, devotes his personal 
energies to making any product for the market, or to improving 
some personal capacity with a view to its productive use, incurs 
risks. In some cases the risks ma}'' not indeed entail real human 
waste, as where the artist or inventor speculates with his crea- 
tive faculty. Or the professional man, preparing for his career, 
may willingly and with zest enter a competition in which prizes 
are few. Men equipped with vigorous intellect and determina- 
tion will get out of the struggle for professional or commercial 
success a satisfaction of which the risk of failure is a necessary 
condition. But for most men a small quantum of hazard 



HUMAN COSTS IN THE SUPPLY OF CAPITAL 91 

suffices. A little risk may stimulate but a larger risk will depress 
efficiency. A doctor, a lawyer, an engineer is willing to put his 
natural and acquired abiKty against those of his fellows in a fair 
field where the chances of success are reasonably large. But when 
the risks are so numerous and so incalculable as they are to-day 
in most professional careers, the anxiety they cause must be 
accounted a heavy human cost. The same applies to the career 
of most modern business men. It also constitutes a new and 
growing cost of labour. 

For though it may be true that the actual risks of a working 
life, personal or economic, are no greater than in former times, 
the emotional and intellectual realisation of these risks is grow- 
ing. Education enables and compels the intelligent workman to 
understand the precarious nature of his livelihood, and his grow- 
ing sensibility accumulates in 'worry'. This is certainly one of 
the main sources of 'industrial unrest'. 

But though risk-taking thus enters as a human cost into the 
life of other owners of productive powers, we do right to accord 
it special attention in relation to the supply of capital. For in 
the provision of all forms of capital, and in the payment for its 
use, risk-taking is an element of primary importance, and, though 
in theory separable from the act of abstinence, postponement, or 
waiting, which comes into prominence as the direct psychical 
cost of saving, it is not separable in industrial practice. 

§ 3. Let us first examine the economic costs involved in the 
provision of industrial capital. That process consists in making, 
or causing to be made, non-consumable goods, which are useful 
for assisting the future production of consumable goods, instead 
of making, or causing to be made, directly consumable goods. 
We need not discuss at length the shallow criticism pressed by 
some socialists to the effect that since labour makes all goods 
whether non-consumable or consumable, the only economic and 
human cost of providing these forms of capital is the productive 
energy of labour. For the decision and effort of mind or will, 
which determines that non-consumables shall be made instead 
of consumables, proceeds not from the labour employed in making 
them, but from the owners of income who decide to save instead 
of spending. This decision to save instead of spending is the 



92 WORK AND WEALTH 

economic force which causes so much of the productive power 
of labour to occupy itself in making non-consumables. It is of 
the first importance that the ordinary business man, to whom 
'saving' is apt to mean putting money in a bank, or buying 
shares, shall reahse the concrete significance of his action. What 
he is really doing is causing to be made and to be maintained 
some addition to the existing fabric of material instruments for 
furthering the future production of commodities. This is not, 
as it may at first appear, a single act of choice, the determination 
to use a portion of one's income, say £ioo, in paying men to 
make steel rails or to put up a factory chimney, instead of pay- 
ing them to make clothes, furniture, or wine for one's current 
consumption. The effort of postponement, or the preference of 
uncertain future for certain present consumables, necessary for 
supplying capital, if it is an effort, is a continuous one lasting all 
the time the capital is in use. The critic who asks, why a single 
'act of abstinence' which is past and done with should be re- 
warded by a perpetual payment of annual interest, fails to real- 
ise that, so far as saving involves a serviceable action of the saver, 
it goes on all the time that the saver lies out of the full present 
enjoyment of his property, i. e. as long as his savings continue to 
function as productive instruments. 

This view, of course, by no means begs the question whether 
there is of necessity and always some human cost or sacrifice 
involved in such a process of saving. It is, indeed, clear that a 
good deal of capital may be supplied without any human costs 
either in postponement of current satisfaction or in risk-taking. 
The squirrel stores nuts by an organic instinct of economy 
against the winter, as the bear stores fat. The thrifty housewife 
lays up provisions by a calculation hardly less instinctive against 
the probable requirements of the family in the near future. The 
balancing of future against present satisfaction, involved in such 
processes, cannot be considered as involving any human cost, 
but rather some shght balance of utility. I am certainly in no 
sense the loser in that I do not lay out all my income the same 
day that I receive it in purchasing immediate satisfaction. Why 
I am not the loser is evident. The first 5 per cent of my income 
I can perhaps spend advantageously at once upon necessaries 



HUMAN COSTS IN THE SUPPLY OF CAPITAL 93 

and comforts which contribute immediately to my welfare. But 
if I know the sum has got to last me for six months, it will evi- 
dently pay me in organic welfare to spread nearly all the rest in 
a series of expenditures over the whole period, so that I may have 
these necessaries and comforts all the time. If my income is no 
more than just sufficient to keep me in full health, i. e. in provid- 
ing vital 'necessaries', organic welfare demands a quite even ex- 
penditure, entaihng the proper quantity of postponement. If 
there is anything over for expenditure on unnecessaries, this will 
not be quite evenly spread over the six months. For any com- 
forts it affords appear to bring more pleasure if enjoyed now than 
in three or sLx months' time.-^ And, besides, there is the question 
of uncertainty of life, upon the one hand, and the risk of being 
unable to get hold of the future comforts when I may want them. 
This depreciation of future as compared with present satisfaction 
and these risks will properly induce me to grade downwards the 
expenditure on comforts during the period in question. But in 
this laying out of my income, so as to secure for myself the max- 
imum of satisfaction and utiHty,^ there is no human cost or 
sacrifice. On the contrary, any failure to 'save' or 'postpone' 
might be attended by a heavy cost. Many a savage has died 
of starvation because he has gorged to repletion instead of storing 
food to tide him over till he gets possession of a new supply. Thus 
this simplest economy of saving, the spreading of consumption 
over a period of time, is evidently costless. 

§ 4. Now, though the saving which consists in keeping stores 
of consumables for future consumption does not furnish what 
would be called capital, and so does not come directly within the 
scope of our particular enquiry into 'costs of capital,' it gives a 
useful test for the economy of saving under modern capitalism. 
The modern saver does not, indeed, usually keep in his possession 
for future consumption a store of consumable goods. It would 

^ Observe that this appearance is illusory. The maximum of organic utility 
would probably involve an even expenditure of all the elements of income with- 
out allowance for my preference of present over future. 

2 It may be urged that, even in respect of necessaries, there will be some discount 
for future as compared with present consumption. But in any class of civilised men, 
whose income is paid at long intervals, this discount will be very small and may 
be ignored. 



94 WORK AND WEALTH 

be inconvenient to store them, many of them are by nature 
perishable and so incapable of storage. Besides, modern indus- 
try affords him a way of making industrial society store them for 
him, or, more strictly, makes it produce a constant supply of 
fresh consumables to which he can get access. Nay, it provides 
still better for his needs, for it enables him, by postponing some 
present consumption to which he is entitled, not merely to take 
out of the constant social supply the full equivalent of his post- 
poned consumption at any time he chooses, but to receive an 
additional small regular claim upon other consumptive or pro- 
ductive goods, called interest. 

This extra payment was regarded by the classical economists 
as a cost or price paid for an effort of abstinence. More recent 
economists have usually chosen to substitute for abstinence 
'waiting' or some equally colourless term. But abstinence is 
better, for it does suggest a painful effort involving some human 
cost, some play of motives naturally adverse to saving which re- 
quires to be overcome by a positive economic pa3anent. Thus, 
not merely the economic, but the moral or human necessity of 
interest is best asserted. 

This abstinence or postponement of possible present consump- 
tion of commodities is admittedly the condition or even the cause 
of the supply of the productive instruments which increase the 
production of future wealth and incidentally furnish the fund out 
of which the interest is paid. For our present purpose, then, it 
makes no difference whether we look at the primitive saving which 
stored consumables for future use, or the modern saving which 
causes productive instruments to be created, apphed and main- 
tained. The question whether there are human costs of saving, 
and what they are, is in the last resort the same in both cases. 

Out of any individual, or social, income a certain amount or 
proportion of saving evidently may be -costless' in the human 
sense. That is to say, the person or society that saves it sustains 
no organic loss or injury by doing so, though he may sometimes 
think or feel he does. If he does so think or feel, society must 
set a counter-weight against this false imaginary loss, in the shape 
of interest. But, as we have already noted, there is a good deal 
of saving which represents the calculated outlay over a period of 



HUMAN COSTS IN THE SUPPLY OF CAPITAL 95 

time, which the owner of an income will make in his own interest. 
In such cases there is no human cost, and if an economic cost 
(interest) is defrayed, it has no human correlative. From the 
standpoint of human distribution of wealth it involves a waste. 

The organic utility to individuals of hoarding, in order, by 
distributing consumption over a longer period of time, to get 
from it a larger aggregate of goods, will thus furnish a consider- 
able quantity of instrumental capital to modern industry. For, 
only by putting the postponed consumption into the form of in- 
strumental capital, can the savers establish the lien they want 
upon the future output of consumables. If all the required cap- 
ital could be got by this simple play of motives, the savers bal- 
ancing more useful future units of consumption against less useful 
present units, with due allowance for risks connected with post- 
ponement, the supply of capital would be humanly 'costless.' 
Though some element of risk, inherent in the proceeding, would, 
taken by itself, carry a cost, the superior utihty attaching to the 
postponed units of consumption, as compared with that which the 
same number of units would afford when added to the consump- 
tion already provided, would offset that cost, so that the 
arrangement, as a whole, would be costless. 

§ 5. Though the method of our analysis has obliged us to ap- 
proach this problem of saving as part of our enquiry into proc- 
esses of production, because it is the means by which a produc- 
tive factor, viz. capital, is supplied, it appertains directly to 
the process of consumption, or outlay of income on consumables. 
As the current expenditure of any member of industrial society 
will be distributed among a number of different purchases, con- 
tributing by natural, conventional, or purely personal connec- 
tions, towards a standard of consumption endowed with maxi- 
mum utility (or what the consumer takes for such), so will it be 
with the distribution of expenditure over points of time. Let 
us elevate into a clear conscious pohcy of calculation what is in 
large measure a blind instinctive conduct, and the organic relation 
between the two ' economies ' is apparent. It involves an intricate 
balancing of larger future utilities, weighted by risks, against 
smaller present utilities not so weighted. To take the simplest 
instance. If, out of an income of £600 coming in this year, I 



96 WORK AND WEALTH 

decide to consume £500 in the current expenditure of the year 
and to put aside £100 for consumption in five years' time (when 
I purpose to work only half-time and earn only half my present 
income), I shall have estimated that the luxuries which I could 
buy this year by the sixth hundred pounds expenditure are 
slightly less agreeable or 'useful' to me than the comforts pur- 
chasable by the fourth hundred pounds as visualised five years 
off, with an allowance for the chance that I may then be dead, or 
that I may have come into a legacy which renders this postpone- 
ment of consumption unnecessary. In a word, this economic ego 
must be conceived as operating by a plan of outlay wliich, in 
regard to the disposal of the current income, has a longitude and 
latitude of survey and valuation. Just as the different ingredients 
of present consmnption make a complex organic whole with del- 
icately proportioned parts, the size and form of each dictated by 
the unified conception of the current standard of comfort, so 
the disposition of the income over a series of points of time in 
which present values of each several consumable and of the 
whole standard are compared with future values, involves the 
similar application of a plan for the reahsation of my economic 
ideal. Though a fully rational conception and calculus, either 
for the composition of current expenditure or for prospective 
outlays, is very rare, some half-conscious, half-instinctive cal- 
culus of the sort must be accredited to everybody.^ So far as it 
is rightly conducted by their reasoning or just instinct, it means 
that, out of all or most of the members of an industrial society, 
some humanly costless saving could be got, some contribution 
towards the socially desirable fund of capital. 

§ 6. As, then, we have seen that a certain proportion of the 
various current activities, which are directly productive in the 
shape of skilled and unskilled labour of brain and hand, are 
either humanly costless or carry some positive fund of human 
utility, so is it also with the processes of saving and risk-taking, 
which go to the supply and maintenance of capital. It is not 
difficult to conceive a society in which all the saving needed for 
the normal development of industry might be costless. In a 
primitive society, based chiefly on agriculture and simple handi- 
^ For a discussion of the nature and limitations of this calculus see Chapter XXI. 



HUMAN COSTS IN THE SUPPLY OF CAPITAL 97 

crafts, one might find the bulk of the working population earn- 
ing a secure and sufi&cient livelihood, but with no margin of sav- 
ings for instrumental capital. The comparatively small amount 
of such capital as was needed might be furnished mainly or en- 
tirely from the surplus incomes of a landowning or a governing 
class, extracted as rent or taxes. Of course, if, as would com- 
monly occur, such rents or taxes were extorted from the peas- 
antry by starving them or by imposing a burden of excessive 
toil, the human costs of such saving would be very heavy. But 
where a class of feudal lords drew moderate rents and fines from 
their tenants, or where a governing caste, such as the Incas in 
ancient Peru, applied to useful public works a large share of what 
would be called the ' economic rent ' of the country, taken in taxa- 
tion, such saving need entail no human cost. Nor is such costless 
provision of capital necessarily confined to a society living under 
simple industrial conditions in which comparatively little saving 
can be utilised. Even in an advanced industrial society the large 
incessant increments of capital might be provided costlessly. For 
if the national dividend were not only very large but so well or 
equably distributed, as income, that all classes had more than 
enough to satisfy their current organic needs, such a society would, 
by a virtually automatic economy, secrete stores of capital to 
meet the future needs of a growing population or a rising standard 
of consumption, as every animal organism naturally lays up 
stores of fat, muscle and physical energy, for future use. 

A well-ordered socialistic state, were such possible, would cer- 
tainly apply the industrial forces at its disposal, so as to secure 
an adequate supply of costless capital. After making proper 
provision out of current industry for the physical and moral 
health of the whole population, and for normal progress in per- 
sonal efficiency of work and life, it would apply the surplus of 
industrial energy to improving the capital fabric of industry so 
as to provide for the production of increasing wealth, leisure, 
and other opportunities in the future. The calculation, as to 
what proportion of current industrial energy should be thus ap- 
plied to preparing future economic goods to ripen for utiHty at 
various distances of time, would of course be a delicate opera- 
tion. But so far as it were correctly carried out, it would be 



98 WORK AND WEALTH 

socially costless. For on the hypothesis that adequate provision 
for current needs of individual stability and progress had been 
a first charge on the industrial dividend, the postponement of 
any additional consumption involved in social saving could not 
rightly be regarded as involving any net human cost. For, if, 
instead of the surplus being saved, it had been paid out to in- 
dividual members of society for current consumption, it would 
ex hypothesi be unproductive of organic welfare, being applied in 
an injurious and wasteful attempt to force the pace of advances 
in the current standard of living. Applying the organic meta- 
phor, one would say that it was a natural function of an organ- 
ised society to secrete capital in due quantity for its future 
life. 

§ 7. But how far can it be held that an industrial society like 
ours is so organised as 'naturally' to secrete the 'right' quantity 
of capital, to provide it in a costless way, and to distribute it 
economicaUy among its various uses? A full answer to these 
questions must be deferred until our analysis of the consumption 
side of the national dividend enables us to assess the human 
utility of the productive work to which capital is applied. At 
present we must assume the utility of the £300,000,000 of savings 
applied out of the aggregate national income to the enlargement 
of industry, and confine ourselves to enquiring what proportion 
of this amount is likely to be 'costless' and how to estimate the 
'human costs' attached to the other part. It is, of course, quite 
evident that such answer as can be given is of a general and spec- 
ulative nature, with no pretence at quantitative exactitude. 

In considering savings with an eye to discovering the human 
costs, it will be well to classify these savings under three heads. 
First will come what may be termed the automatic saving of the 
surplus income of the rich, that which, remaining over, after all 
wants, inclusive of luxuries, are satiated, accumulates for invest- 
ment. The proportion of new capital proceeding from this 
source will vary with the amount and regularity of such income, 
its distribution among the rich, and their attitude of mind to- 
wards the expenditure of their incomes. The automatic or spon- 
taneous character of this saving is due to the fact that no close 
relation exists between progress in industry and the evolution 



HUMAN COSTS IN THE SUPPLY OF CAPITAL 99 

of a personal standard of consumption. Sudden rapid advances 
of income are not usually accompanied by a corresponding pres- 
sure of new personal wants tending immediately to absorb in 
increasing expenditure each increase of income. Though no 
limit can be set upon the expenses of a luxurious standard of con- 
sumption and the vagaries of personal extravagance, expensive 
habits take time for their establishment, and in a progressive in- 
dustrial society where skilful, or lucky, business men are making 
fortunes rapidly, their acquisitive power will be apt to run far 
ahead of their consumptive practice. Moreover, the absorption 
in the practice of making money evidently retards the full ac- 
quisition of habits of lavish expenditure, giving full scope to the . 
development neither of tastes nor of opportunities. This will 
be particularly true of incomes growing not by regular incre- 
ments but by sudden rushes. Extreme instances abound in the 
recent history of America. Where the quick skilful seizure of 
new sudden opportunities, conjoined with a general development 
of national resources at an abnormally rapid pace, enables a 
Jay Gould or a John D. Rockefeller to amass millions within a 
few years, a wide natural divergence is created between income 
and expenditure. Enormous masses of unspent income thus roll 
up into capital which again continually grows by the accumula- 
tion of the unspent interest it earns. Though the number of 
persons in this position of financial magnitude is very few, a 
considerable class of successful business men in America and in 
every advanced European country comes into the same category 
as regards capacity of saving. While their personal and family 
expenditure may be continually rising, it will tend to keep in 
safe adjustment to what may be termed a conservative estimate 
of their income. The occasional great trading coups, the enor- 
mous profits of a commercial or financial boom, will not even tend 
to be assimilated in expenditure. 

Wherever the economic circumstances of a country are such 
as to throw a large proportion of the growing wealth into the 
hands of a class of busy rising men, by a series of great windfalls 
or more or less incalculable increments, the new capital flowing 
from these superfluous incomes will be large. Moreover, so far 
as it is automatic, it will have little if any regard to rate of in- 



100 WORK AND WEALTH 

terest, and thus to 'social demand', so far as interest can be 
considered a just index of social demand.-^ 

Even when the element of fluctuating or fortuitous increase 
of income is not present, a fairly rapid advance of income, par- 
ticularly where it is 'earned' and therefore carries no presump- 
tion of indefinite continuance, will ordinarily leave a considerable 
margin of automatic saving. This will be larger where the stand- 
ard of living is already established on a high level. For though 
certain curious psychological traits seem to show an extraordi- 
nary concentration of personal interest in the extravagances 
which give personal distinction in 'society', the low pressure of 
organic utihty, or the emergence of positive disutility inherent 
in many of these forms of luxury, must be considered to exer- 
cise some check. Putting the matter simply, one would say that 
real primary human needs are more readily assimilated in a stand- 
ard of consumption than purely conventional or positively in- 
jurious modes of expenditure. So, making every allowance for 
the depravity of tastes and the zest for competitive extravagance, 
it will remain true that the classes with large incomes will tend 
to contribute to capital a large amount of surplus income by a 
process of automatic accumulation. 

For such saving there is neither an economic nor a human cost 
involved : the interest it receives is in the economic sense as much 
a 'surplus' as the rent of land. Not merely is there no human 
cost, there is a positive human utility in such saving, for it is an 
instinctive rejection of the injurious effort to incorporate this 
surplus in a current expenditure already adequate to satisfy all 
felt wants, good or bad. 

It is likely that a large and a growing proportion of the total 
volume of saving in England and in the Western world is of this 
order. For though it may not be generally true that the rich 
are growing richer and the poor poorer, it is probably true that 
both a larger quantity and a larger proportion of the national 
income are in the hands of rich and well-to-do business men 
whose means have been advancing faster than their expenditure. 

^ ' So ingrained is the habit of accumulation among the prosperous classes of 
modern society, that it seems to proceed irrespective of the rate of interest.' Taus- 
sig, Principles of Economics, Vol. II, p. 27. 



HUMAN COSTS IN THE SUPPLY OF CAPITAL loi 

§ 8. So much for the automatic saving of the rich. We have 
next to take into account the admittedly large contribution of 
the classes who in respect of income are 'middle'. This com- 
prises the great majority of families engaged in the directive 
work of manufacture and commerce, and almost the whole of the 
upper grades of the professional and official classes in such a 
country as ours, as well as a considerable number of persons of 
moderate 'independent' means. A certain amount of conscious 
'thrift' is traditional in these classes. It is by no means auto- 
matic, but involves for the most part some conscious sacrifice of 
current satisfaction in favour of a greater estimated future sat- 
isfaction to the saver or his family. The motives which influence 
such saving, alike in its amount and its appHcation as capital, 
are complex and various. But the sacrifice ascribed to such sav- 
ing cannot be assumed to involve any economic cost, in the sense 
that it requires the payment of economic interest to evoke it. 
Still less can it be assumed to involve a human cost. A good deal 
of this middle-class saving, though less automatic than the sav- 
ings of the rich, is a calculated postponement of some expendi- 
ture which might purchase present comforts or luxuries, in order 
to make provision for the purchase of necessaries or conveniences 
at some future time. In a word, it is of the nature of the ' stock- 
ing' saving, which the better- to-do peasants have always prac- 
tised before the opportunities of profitable and fairly safe in- 
vestment were open to them. Though utilised to earn interest, 
the saving would be made just the same if no objective interest 
were attainable, provided it were tolerably secure against pillage 
or destruction. Risk counts for more than interest in such sav- 
ing, and the bulk of the so-called interest which such savings de- 
mand, as a condition of loan or investment, is not true interest 
but insurance. But in practice inseparable from such saving is 
that undertaken with the direct object of earning interest upon 
the capital. A great deal of middle-class saving, and some saving 
of the rich class would not take place without the hope of receiv- 
ing interest. If no interest were attainable, though some saving 
might take place, in order to provide against the possibility of 
a total collapse of current earning power and a consequent dep- 
rivation of the necessaries of life, there would be little disposi- 



I02 WORK AND WEALTH 

tion to give up any present free expenditure on comforts in order 
to provide for future comforts which might not be wanted, or 
which, in consequence of loss of savings, might not be procurable. 
A positive bonus in the shape of interest seems necessary to evoke 
this latter saving. The operation of this bonus as an inducement 
is, however, very complex. It might appear at first sight ob- 
vious that, the larger the bonus in the shape of rate of interest, 
the greater the aggregate of saving it would evoke. So far as 
non-automatic saving is motived by a general desire to be better 
off in the future, in order to attain a standard of consumption 
and of social consideration which denote success and satisfy per- 
sonal ambition, or in order to bequeath a large estate to one's 
family, higher interest will tend to evoke a corresponding in- 
crease of saving in those whose current incomes enable them to 
save considerable sums without encroaching upon their estab- 
lished standard of comfort. Young or middle-aged men, of an as- 
piring nature and with rising incomes, will undoubtedly save more 
if they see a handsome return on their investments. But, as most 
men will reahse more clearly and feel more keenly these future 
economic and social gains if the full fruits of such savings will be 
reaped by themselves, not by their heirs, ageing men will be 
likely to respond less freely to this motive. Present comfort, 
security, and power, will mean more to them than a future liber- 
aHty of Hving which they can only hope to enjoy for a few years, 
if at all. The amount, therefore, of the acceleration of saving 
achieved by a rise of interest will depend a good deal upon the 
relative importance this general desire to be better off possesses 
as an inducement to save. That relative importance again will 
depend a good deal upon whether the economic and social con- 
ditions of the community place considerable numbers of younger 
business or professional men in a position of rising incomes and 
of considerable saving power, or, on the contrary, confine such 
surpluses chiefly to older men. 

If, instead of taking as our motive a general desire to be better 
off, we take a desire to save in order to make some limited 
specific provision, as for example to buy an annuity of £ioo, the 
effect of a higher rate of interest upon volume of saving is likely 
to be different. Though it may serve to quicken in some degree 



HUMAN COSTS IN THE SUPPLY OF CAPITAL 103 

the pace at which the sum required will be amassed, it will re- 
duce the absolute amount of saving. For when interest is higher, 
the capital sum required to yield an annuity of £100 a year will 
be less than before. Against this, however, must be set the fact 
that, when a definite sum is needed in order to pay off some debt, 
or to furnish a sufl&ciency for retirement, a high rate of interest 
may be required in order to make this saving possible or certain. 
If a man cannot save enough to attain such definite object, he 
will not save at all, for an insufiicient amount will be held futile; 
whereas, if a rise of interest gives him a good prospect of saving 
the required amount, he will put forth the effort. 

§ 9. But making due allowance for counteracting motives, it 
is tolerably certain that a rise of interest, showing any signs 
of continuance, will stimulate an increase of 'motived' saving, 
though by no means a proportionate increase. Thus it will ap- 
pear that, so far as this large section of middle-class saving is 
concerned, some definite measurable economic costs, in the sense 
of deprivation of current consumption, are involved, requiring 
compensation in the shape of interest. But the question which 
concerns us is whether there are human costs corresponding to 
and involved in these economic costs. In answering this ques- 
tion, it is not enough to point to the admitted fact that this sav- 
ing involves the failure to satisfy some current desire for increased 
consumption. It has to be considered whether the sacrifice of 
current 'satisfaction' is really a sacrifice of welfare, either from 
the standpoint of the saver, or of the society of which he is a mem- 
ber. For we have not taken the view that the personal transient 
desires and valuations of consumers are a final criterion, either 
of personal or social welfare. If then the saving evoked by pay- 
ing interest merely means that certain fairly well-to-do folks ab- 
stain from comforts or luxuries, which, though agreeable and inno- 
cent, carry no organic benefit, there is no human cost, or even 
if there is some slight cost, it may be offset by the individual or 
social benefit resulting from the postponement of consumption. 
A large proportion of motived middle-class saving undoubtedly 
falls within this category. But by no means all. A good deal 
of lower middle-class saving eats into certain factors of humanly 
serviceable expenditure, particularly expenditure in education 



I04 WORK AND WEALTH 

of the young. Frequently it injures the free life of the home by 
the constant pressure of niggling economies, which, though not 
perhaps injurious in the particular privations they impose, leave 
no margin for the small pleasures and amenities which have 
a vital value. Even though we assume that such saving brings, 
in the ownership of property and the interest it yields, a full 
vital compensation to the individual who saves, it by no means 
follows that it is socially justified, when a true criterion of social 
welfare is applied. Take for instance the saving which is di- 
verted from expenditure on education, precluding the children 
from getting a university or professional training and turning 
them on the world to earn a living, less effectively equipped than 
they might have been. Society may be a heavy loser by its 
policy of evoking such thrift by means of interest, for it obtains 
a certain amount of material capital in place of the more valua- 
ble intellectual or moral capital which the money, expended upon 
education, might have yielded. Even regarded from the stand- 
point of future economic productivity, the stimulation of this 
sort of saving is likely to be injurious. 

§ I o. Far graver importance attaches to this consideration when 
we approach the savings of the working-classes. The contribu- 
tion made from this source to the flow of fresh capital, the 
£300,000,000 per annum, is evidently attended by heavy human 
costs. Very Httle of it can be regarded as the considered reason- 
able outlay over a long period of time of income not needed for 
current organically useful consumption. Most of it involves a 
stinting of the prime necessaries or conveniences of life, or of 
some rise in present expenditure which would promote the health 
or efhciency of the family. Almost the only saving made by 
ordinary wage-earners not attended by this human sacrifice is 
that applied by young workers, who having only themselves to 
keep, can afford to set aside some portion of their pay in full em- 
ployment so as to furnish a future home, and to insure against 
a few special emergencies involving loss of earning power or ex- 
penses connected with death or sickness. Even such personally 
serviceable insurances the married worker can seldom properly 
afford. Though the narrower view of the economy of a self- 
sufficing family may appear to justify savings made out of a 



HUMAN COSTS IN THE SUPPLY OF CAPITAL 105 

wage the entire present expenditure of which can be applied to 
purposes of organically useful consumption, the wider social 
standpoint does not endorse this policy. For a workman to 
pinch on housing, clothing, the education of his children, or upon 
wholesome recreation, in order to avoid worse pinching in some 
unforeseen but probable emergency, may be sound individual 
economy. But, unless society is unable from other resources at 
its disposal to provide against these emergencies of working- 
class life, it is an unsound social economy, involving a heavy net 
cost of social welfare. The issue is a very vital one. It may be 
stated in this concrete form. Most of the savings effected in this 
country out of a family income of 30/ or less per week, and much 
of the savings made out of a larger income when the worker's 
family is young, involve a sort of abstinence which is fraught 
with heavy net costs in the social economy. No part of the 
economically necessary fund of annual capital ought to be drawn 
from this sort of saving. It is Uterally a coining of human life 
into instrumental capital, and the degradation of the term 
'thrift' in its application to such saving is a damning commen- 
tary upon the false standard of social valuation which endorses 
and approves the sacrifice. The great risks of loss which actu- 
ally attend such saving, and the heavy expenses of the machinery 
of its collection and administration, aggravate the waste. If we 
ascribe £50,000,000 ^ out of the £300,000,000 to this class of 
sa\dngs, a proper social book-keeping would put the human costs 
of this working-class abstinence as a large offset to the net utility 
of the other £250,000,000. The forethought, endurance, and other 
real or supposed benefits to the character of the workers imputed 
to this ' thrift ' can no more be regarded as a compensation for such 
social injury, than can the discipline and fortitude of soldiers 
be regarded as a testimony to the net human economy of war. 

^ This is most likely a gravely excessive estimate. Probably £30,000,000 or 
^/ 10 of the national saving would be nearer the mark. Moreover, a large proportion 
of working-class savings is not destined to purposes of permanent investment but 
to provision for some early probable emergency, e. g. burial or unemployment which 
will cancel the saving. There exist no approximately reliable estimates of the 
amount of capital belonging to the working-classes. The usually accepted figure in- 
cludes under the head of Post Office Savings Bank and Building Societies a large but 
unknown quantity of middle-class savings. 



CHAPTER IX 

HUMAN UTILITY OF CONSUMPTION 

§ I. When we turn to the other side of the account, the human 
utihty which this £2,000,000,000 of goods and services repre- 
sents, we enter a country which, as we have already recognised, 
Pohtical Economy has hardly begun to explore. For though the 
trend of a large modern school of economists has been to find in 
consumption the vis motrix of all economic processes, and to 
bring close study to bear upon the pressure of consumers' wants 
as they operate through demand in the markets of commodities, 
this volte face in the theory of values does not render much assist- 
ance to our human valuation. For their analysis of demands 
does not help us to interpret expenditure in terms of human util- 
ity. As an instrument for such a purpose it is doubly defective. 
For, in the first place, it is concerned entirely with the actual 
felt wants and preferences which in fact determine purchases. 
In the second place, it takes for granted the existing distribution 
of incomes or. consuming power, tracing the operation of this 
power of demand upon the actual economy of economic processes. 
Now these limitations, quite necessary for the purely economic 
interpretation, are not suited to our requirements. 

The current standard of valuations and of choice cannot be 
taken as an adequate standard of individual or social welfare. 
Felt wants, and demands based on them, form no doubt some in- 
dex of welfare, but an insufficient one. 

A considerable proportion of the goods and services included 
in the real income which we are analysing must from our stand- 
point be classed not as wealth, but as 'illth', to adopt Ruskin's 
term. What proportion we should place in the category will of 
course depend upon the degree to which we hold that the actual 
evolution of the arts of consumption has been distorted from its 
* natural' course. But everyone will admit that many sorts of 
marketable goods and services are injurious alike to the individ- 

106 



HUMAN UTILITY OF CONSUMPTION 107 

uals who consume them and to society. A large proportion of the 
stimulants and drugs which absorb a growing share of income in 
many civilised communities, bad Hterature, art and recreations, 
the services of prostitutes and flunkeys, are conspicuous instances. 
Not merely does no human utility correspond to the economic 
utility ascribed to such goods, but there is a large positive dis- 
utility. The aggregate human value of a growing national in- 
come may easily be reduced by any increase in the proportion 
of expenditure upon such classes of goods, and tendencies of dis- 
tribution which lead to such proportionate increase may even in- 
vahdate the assumption that social welfare upon the whole grows 
with the growth of the national dividend. We shall presently 
consider some of the factors in our social structure which bring 
about the development of definitely bad demands and bad prod- 
ucts to satisfy them. 

But just as we must write to the debit side of our human ac- 
count a great many articles which figure on the credit side in 
ordinary economic book-keeping, so we shall be compelled to 
revise the comparative values attached to those articles which 
contain actual powers of human utility. A valuation which sets ' 
an equal value upon each part of a supply because it sells for 
the same sum cannot serve the purposes of a human valuation. 
For the amount of human utility, individual or social, attaching •> 
to the consumption of any stock of goods or services, must evi- 
dently depend in large degree upon who gets them and how much 
each consumer gets, that is to say upon their distribution. 

The same goods figure as necessaries of life or as waste accord- 
ing to who gets them. Some quarters of the same wheat supply 
furnish life and working energy to labourers, other quarters pass 
unconsumed into the dustbins of the rich. 

There is, moreover, a third consideration which counts in the 
process of converting economic into human values. As in the dis- 
tribution of productive energy human economy requires an ad- 
justment to the individual capacity of production, so in the dis- 
tribution of consumptive utilities a corresponding regard must 
be paid to the natural or acquired capacity of the individual con- 
sumer. Some persons have greater natural capacity than others 
for the use or enjoyment of certain classes of goods, material or 



io8 WORK AND WEALTH 

immaterial. An absolutely equal distribution of bread, or any 
other necessity of life, on a per caput basis, would evidently be a 
wasteful economy. What applies to the prime physical wants 
will apply more largely to the goods which supply 'higher' wants. 
For, as one ascends from the purely animal to the spiritual wants, 
the divergences in capacity of utiHsation will grow. This does 
not necessarily imply very wide differences in the aggregate 
quantity of wealth which can be usefully consumed by different 
persons, because deficiencies in some tastes or capacities may be 
compensated by development of others. Moreover, the widest 
personal differences will usually He outside the range of economic 
satisfaction. Yet even arno'ng economic consumers there will 
be considerable differences in the amount of organic service or 
satisfaction that different persons can get out of the same amount 
of goods. A noble work of art, as Ruskin insisted, has no value 
for primitive peasants without cultivated tastes. The finest 
library of serious Hterature has httle value to-day in an ordinary 
English industrial town. But it is needless to multiply examples 
to illustrate the truth that the vital value got from any stock of 
consumable wealth must depend upon the capacity of those into 
whose hands it passes to make a good use of it. In other words, 
it depends upon how far the consumer has acquired the art of 
consumption. Nor is this merely a question of developing and 
cultivating sound tastes in a class or a people. It is often a mat- 
ter of knowledge how to extract and utiHse the utihty which goods 
contain. It is sometimes pointed out that over 90 per cent of 
the heating power of coal burned in domestic fires is wasted. 
Improved grates, or the substitution of some central heating 
system, might stop a considerable portion of this waste, securing 
an increase of heating power and of its vital value out of each 
ton burned. 

§ 2. Until we know then 'What are the concrete goods repre- 
sented by the £2,000,000,000 income? How are they appor- 
tioned among different classes of the consuming public? How 
far are those who get these goods qualified to get the vital value 
out of them?' we cannot compute, even in general terms, the 
aggregate human utility they carry. 

Our calculus of the human utility of consumption will thus in 



HUMAN UTILITY OF CONSUMPTION 109 

form and method closely correspond with our calculus of the 
human cost of production. Taking as the subject-matter of our 
analysis the goods and services constituting the real income of 
the nation, our analysis of production endeavoured to apply 
two criteria, one relating to the Arts of Production actually em- 
ployed, the other to the Distribution of the productive efforts 
involved in the employment of these arts. Similarly, our analy- 
sis of consumption rests upon the apphcation of like criteria 
to the Arts of Consumption and the Distribution of consuming 
power. 

In the productive analysis, considerations of the methods of 
industry, in relation to the quantity of creative and imitative, 
interesting and repellent work, the use of machinery and sub- 
divided labour, the elements of forethought, risk-taking, and or- 
ganisation, length of the work-day, regularity of emplo3mient, 
apportionment of routine industry among the grades and classes 
of producers, are found to be the main determinants of the sum 
of human costs. A similar analysis, applied to the consideration 
of the standards and methods of consumption prevailing among 
the different grades and classes of consumers, and to the distribu- 
tion of consuming power amiong these classes as to amount and 
regularity, will yield a sum of human utility. 

But in approaching the arts of consumption, we find they have 
not developed in the same way as the arts of production. 

Starting from primitive society with the practically self- 
sufiicing family-group, where everybody took a hand in the 
different sorts of work and a share in the consumption of the 
different products, we find ourselves carried along a career of con- 
tinual differentiation of labour not attended by any correspond- 
ing differentiation of consumption. Industry passes into large co- 
operative fornis outside the single family, with constantly finer 
division of labour. But consumption is still chiefly carried on 
within the hmit of the single family,^ and, so far from being 
speciahsed, it becomes more generaHsed. This contrast of man 

^ Collective or cooperative consumption outside the home or family is of course 
increasing. Not only have we municipal supplies for public use, e. g. schools, libra- 
ries, museums, parks, baths, lighting, etc., but many forms of private expenditure of 
income on educational, recreative, philanthrophic and other cooperative modes of 
consumption. 



no WORK AND WEALTH 

as producer and consumer is of the first importance. Modern 
industrial evolution shows a man becoming narrower and more 
specialised on his producing side, wider and more various on his 
consuming side. As worker, he is confined to the constant repeti- 
tion of some section of a process in the production of a single 
class of article. As consumer, he is in direct contact with thou- 
sands of different sorts of workers in all parts of the world, and 
by his various consumption applies a direct stimulus which vi- 
brates through the whole industrial system. As producer he is 
'the one', as consumer 'the many'. 

This diverging tendency in the economic evolution of man has 
important human implications which will concern us later. At 
present it concerns us in its bearing upon the arts of consumption. 

§ 3. The great complex unit of productive activities which 
engaged our attention was the Business. Productive economy, 
the amount of human cost involved in the production of a given 
quantity of goods, depended, as we saw, upon the structure and 
working of this Business. What is the consumptive unit that 
corresponds to the Business? It is the Family, or Home, re- 
garded on its economic side. There is an economy of consump- 
tion in the family standard of life as important for social welfare 
as the economy of production in the Business. As the former 
stands towards costs of Production, so the other stands towards 
utility of Consumption. As the economy of Production chiefly 
consists in minimising cost, so the economy of Consumption 
should consist in maximising utility. But the standard of con- 
sumption has in modern times not been subjected to the same 
forces as have operated upon production. Though in the be- 
ginning, as we saw, both were natural, organic and related proc- 
esses, the modern rationalisation of industry has not been ac- 
companied by a corresponding rationalisation of consumption. 
Inventors and transformers of industry have not had their coun- 
terpart in consumption. A hundred times the quantity of 
thought and effort has gone into the recent evolution of a single 
industry, such as cotton or chemicals, that has gone into the 
improvement of consumption. It is not difficult to understand 
the reasons of the great conservatism of the consumptive arts. 
In primitive societies, where each family is a self-sufi&cing eco- 



HUMAN UTILITY OF CONSUMPTION iir 

nomic unit, or where division of labour is on the simplest Knes, 
the industrial arts are almost as conservative as the methods of 
consimiption. The adoption of a new way of working is nearly 
as difficult as the adoption of a new want. Custom rules both 
with an almost equal sway, though even at this stage its hold 
upon the organic feelings will be somewhat stronger on the con- 
suming side, especially in matters of food and of family or tribal 
ritual. It will be a Httle easier to use a new sort of snare, or to 
change the shape of a pot or basket, than to take to a new head- 
gear or a new way of cooking meat. But when the industrial 
arts have advanced a certain way, two forces combine to break 
the bond of custom and to encourage experiments and improved 
methods. While consumption continues to be carried on in a 
number of simple actions involving no considerable effort or 
conscious attention, industry has passed into a related series of 
processes of considerable duration and involving many separate 
acts of conscious effort and attention. The production of an ar- 
ticle will thus present a far larger number of opportunities for 
change than its consumption, and there will be a greater Hkeli- 
hood that advantageous changes will be tried and adopted. A 
new idea of saving labour, the chance discovery of some new 
material, will be approved more readily than any suggestion for 
some new food or an unaccustomed article of clothing. For, in 
the former case, the reasoning faculty is of necessity ahve and 
operative to some degree, and the gain of the change can be real- 
ised experimentally, while in the latter case, the reasoning fac- 
ulty is hardly awake, and any novelty of consumption is apt to 
have an initial barrier of natural aversion to overcome. 

But there is another reason for the easier progress of the pro- 
ductive costs. In proportion as work passes into the shape of 
an organised business, administered by an employer for profit, 
the control of any of its processes by primitive custom or taboo 
tends to disappear. For the rationaHsm involved in the profit- 
able conduct of the business compels the employer to break any 
traditional barriers obstructing the adoption of profitable re- 
forms. Though there are doubtless many reforms of the con- 
sumptive arts as humanly economical and profitable as any of 
the great industrial reforms, there is not the same concentrated 



112 WORK AND WEALTH 

motive of large immediately realised gains to urge their claims 
on any body of consumers. Not only are the gains from an im- 
provement in production more immediate, more concrete and 
more impressive, but the risks and inconveniences of the change 
are largely borne by others than the reformer, viz. his em- 
ployees, or his shareholders. The consumer, on the other hand, 
has himself to bear all risks and inconveniences involved in the 
abandonment of an old article or method of consumption, or 
the adoption of a new one. Finally, it must be remembered 
that the actual risks attending an innovation are greater for 
the consumer. For the modern producer is a skilled specialist 
in the particular art of production in which he is engaged, the 
consumer is an unskilled amateur in a more general art, possess- 
ing little knowledge and no effective power of organising for his 
self-defence. 

§ 4. The fact that the monetary profit of producers is the 
principal determinant of most changes in the nature of con- 
sumables and the standards of consumption is one of the most 
serious sources of danger in the evolution of a healthy social 
economy. The present excessive control by the producer injures 
and distorts the art of consumption in three vv^ays. i. It im- 
poses, maintains and fosters definitely injurious forms of con- 
sumption, the articles of 'illth'. 2. It degrades or diminishes 
by adulteration, or by the substitute of inferior materials or 
workmanship, the utility of many articles of consumption used 
to satisfy a genuine need. 3. It stimulates the satisfaction of 
some human wants and depresses the satisfaction of others, not 
according to their true utility, but according to the more or less 
profitable character of the several trades which supply these 
wants. 

The prevalence of many of the most costly social evils of our 
time, war, drink, gambling, prostitution, overcrowding, is 
largely attributable to the fact that their material or trade ap- 
pliances are sources of great private profit. Such trades are the 
great enemies of progress in the art of life, and the rescue of the 
consuming public from their grip is one of the weightiest prob- 
lems of our time. Two methods of defence are suggested. One 
is the education and cooperation of consumers. But while educa- 



HUMAN UTILITY OF CONSUMPTION 113 

tion may do much to check the consumption of certain classes 
of 'illth', it can hardly enable the consumer to cope with the 
superior skill of the specialist producer by defeating the arts of 
adulteration and deterioration which are so profitable. Con- 
sumers' Leagues can perhaps do something to check adulteration 
and sweating, by the emplo3rment of skilled agents. But it will 
remain very difficult for any such private action to defeat the 
ever-changing devices of the less scrupulous firms in profitable 
trades. The recognition of these defects of private action causes 
an increased demand for public protection, by means of legisla- 
tive and administrative acts of prohibition and inspection. The 
struggle of the State to stamp out or to regulate the trades which 
supply injurious or adulterated foods, drinks, and drugs, to stop 
gambling, prostitution, insanitary housing, and other definitely 
vicious businesses, is one of the greatest of modern social ex- 
periments. Though the protection of the consumer is in many 
cases joined with other considerations of public order, it is the 
inherent weakness of the consumer, when confronted by the re- 
sources of an organised group of producers, that is the primary 
motive of this State policy. How far the State protection is, 
or can be made effective, is a question too large for discussion 
here. It must suffice to observe that the conviction that the 
private interests of producers will continue to defeat all at- 
tempts at State regulation in socially 'dangerous trades' fur- 
nishes to socialism an argument on which there is a tendency to 
lay an ever greater stress. 

§ 5. These reflections are necessary as preliminary to the con- 
sideration of the statics and dynamics of consumption in any 
nation or class. For they represent the most important class of 
disturbing influences in the evolution of standards of consump- 
tion. 

Now in considering the proper mode of estimating the human 
utility contained in our £1,700,000,000 worth of 'consumables', 
we must consider, first, the validity of the standards of consump- 
tion in which they are incorporated. If we have grounds for 
believing that actual standards of consumption are moulded by 
the free pressure of healthy organic needs, evolving in a natural 
and rational order towards a higher human life, there will be a 






114 WORK AND WEALTH 

presumption favourable to the attribution of a high measure of 
human utiHty to the aggregate income. In this enquiry we may, 
therefore, best start by considering the evolution of wants and 
modes of satisfying them, as reactions of the half-instinctive, 
half-rational demands of man upon his environment. Human 
animals, placed in a given environment (with some power of 
moving into another sHghtly different one or of altering slightly 
that in which they are) develop standards of work and of con- 
sumption along the lines of 'survival value'. The earliest stages 
in the evolution of both standards, consumption and industry, 
must be directed by the conditions of the physical struggle for 
life. The modern historical treatment of origins applies this 
principle in the analysis of physical environments, in which Le 
Play and Buckle have done such valuable pioneer work, and 
which such thinkers as Professor Geddes have carried further in 
their schemes of regional survey. 

Though the fundamental assumption v/hich seems to under- 
lie this method, at any rate in its fulness, viz. that there is only 
one sort of mankind and that all the differences which emerge 
in history, whether of 'racial' character or of institutions, are 
products of environment, is open to question,^ the dominant part 
played by physical environment in determining the evolution of 
economic wants and satisfactions, is not disputed. 
I Like other animals, men must apply themselves to obtain 
out of the immediate physical environment the means of main- 
tenance — the food, shelter and weapons, the primitive tools, 
which enable them to work and live at all. If we consider sep- 
arately the consumptive side of this economy, we seem to grasp 
the idea of an evolution of a standard of consumption, moulded 
by the instinctive selection of means to satisfy organic needs 
of the individual and the species. The sorts of food will be those 
obtained by experiments upon the flora and fauna of the country, 
guided mainly by 'instinct', though some early conscious cun- 
ning of selection and of cultivation will serve to improve and in- 
crease the supplies. The clothing will consist of furs or plaited 
fibres got from the same natural suppHes. The shelter will con- 

^ For the fullest and most recent exposition of this theory see Mr. J. M. Robert- 
son's The Evolution of States (Watts & Co.). 



HUMAN UTILITY OF CONSUMPTION 115 

sist of an easy adaptation of trees, caves or other protective pro- 
visions of nature. Even the early tools, weapons and domestic 
utensils, though admitting some more rational processes of se- 
lection and adaptation, will remain half-instinctive efforts to 
meet strong definite needs. So long as we are within this narrow 
range of primary animal wants, there is perhaps little scope for 
grave errors and wastes in standards of consumption. Doubtless 
mistakes of omission are possible, e. g. a tribe may fail to utiHse 
some abundant natural supply of food which it is capable of as- 
similating. But such omissions will probably be rare, at any 
rate in cases where population comes to press upon the food 
supply, so evoking experiments in all natural resources. Grave 
errors of commission, e. g. the adoption of poisonous ingredients 
into the supply of food or other necessaries, will be impossible, 
so long as we are dealing with factors of consumption which have 
a definite survival value. This seems to apply, whether we at- 
tribute some instinctive wisdom or some more rational process 
of selection as the evolutionary motive. In either case we have 
substantial guarantees for the organic utility of most articles 
which enter the primitive standard of consumption. This view 
is, of course, quite consistent with the admission that in the de- 
tailed operation of this economy there will be a large accumula- 
tion of minor errors and wastes. The most accurate instinct 
affords no security against such losses: indeed the very strength 
of an animal instinct entails an inability of adaptation to ec- 
centricities or irregularities of environment. No one can doubt 
this who watches the busy bee or the laborious ant pursuing their 
respective industries. 

§ 6. If man had always lived either in a stationary or a very 
slowly changing environment, he would have remained a creature 
motived almost wholly by specific instincts along a fairly ac- 
curate economy of prescribed organic needs. The substitution 
of reason for a large part of these specific instincts was evoked 
by the necessity of adaptation to changes and chances of envi- 
ronment so large, swift or complex, that specific instincts were 
unfitted to cope with them. Hence the need for a general 'in- 
stinct ' of high adaptive capacity, endowed with a power of cen- 
tral control operative through the brain. The net biological 



ii6 WORK AND WEALTH 

economy of this evolution of a central conscious 'control', 
in order to secure a better adjustment between organism and 
environment, carries us to a further admission regarding the 
organic value of the basic elements in a standard of consump- 
tion. 

By the use of his brain man not merely selects from an indef- 
initely changing environment foods and other articles condu- 
cive to survival, but adapts the changing environment to his 
vital purposes. He alters the physical environment, so as to 
make it yield a larger quantity and variety of present and future 
goods, and he combines these goods into harmonious groups 
contributing to a 'standard' of consumption. In this adaptive 
and progressive economy, evolving new needs and new modes of 
satisfying old needs, shall we expect to find the same degree of 
accuracy, the same immunity from serious error as in the nar- 
rower statical economy of ' instinctive ' animalism? 

In the processes of adapting external nature for the provision 
of present, still more of future, goods, in discovering new wants 
and methods of satisfying them, and in assimilating the new 
wants in a standard of consumption, there will necessarily be 
larger scope for error. But so long as the inventive and pro- 
gressive mind of man confines the changes, alike of industry and 
of consumption, to the sphere of simple material comm^odities 
having a close and important bearing upon physical survival, 
the limits of error and of waste must continue to be narrow. All 
such progress will require experimentation, and experiment im- 
plies a possibility of error. But at this early stage in the evolu- 
tion of wants, any want, or any mode of supplying a want, which 
is definitely bad, will be curbed or stamped out by the conditions 
of the struggle for Kfe. A tribe that tries hastily to incorporate 
a tasty poison in its diet must very soon succumb, as many 
modern instances of races exposed to the attraction of 'fire- 
water ' testify. Thus far it may be admitted that organic utility 
will assert its supremacy as a regulative force, not only in the 
rejection of the bad, but in the selection of the good. The low 
standard of consumption of a prosperous caveman or of a primi- 
tive pastoral family must conform to an economy of high utility. 
Not only would all his ingredients of food, clothes, shelter, firing 



HUMAN UTILITY OF CONSUMPTION 117 

and utensils, be closely conducive to physical survival, but they 
would be closely complementary to one another. This comple- 
mentary structure of the standard of consumption follows from 
the organic nature of man. Unless all his organic needs are con- 
tinuously met he perishes. While, therefore, he may know 
nothing of the distinctions which science later will discover in 
the necessary constituents of food, he must have worked out em- 
pirically a diet which will give him some sufficiently correct com- 
bination of proteids, carbohydrates and fats, and in the forms in 
which he can assimilate them. So also with his clothes, if he 
wears them. No savage could possibly adopt, for ordinary wear, 
costumes so wasteful and so inconvenient as flourish in civiHsed 
societies. Similarly with housing and utensils. And not only 
must the articles belonging to each group of wants be comple- 
mentary, but the groups will themselves be complementary. 
The firing will have relation to the times and sorts of feeding: 
clothing and shelter will be allied in the protection they afford 
against weather and enemies: tools and weapons will be even 
more closely related. 

Thus in the earHer evolution of wants, when changes, alike 
of ways of living and ways of work, are few and slow and have 
a close bearing on survival, a standard of consumption will have 
a very high organic value. 

§ 7. But when man passes into a more progressive era, and a 
definite and fairly rapid process of civilisation begins, the brain 
continually devising new wants and satisfactions, we seem to 
lose the earlier guarantees of organic utility. When the stand- 
ard of consumption incorporates increasing elements, not of 
necessaries but of material conveniences, comforts and luxuries, 
and adds to the satisfaction of physical desires that of psychical 
desires, how far may it not trespass outside the true economy of 
welfare? So long as the requirements of physical survival dom- 
inate the standard, it matters little whether animal instinct or 
some more rational procedure maintains the standard. But when 
these requirements lose control, and a standard of civilised hu- 
man life contains ever larger and more numerous elements which 
carry little or no 'survival value', the possibilities of error and of 
disutility appear to multiply. 



ii8 WORK AND WEALTH 

If civilisation, with its novel modes of living, be regarded as 
an essentially artificial process, in which considerations of or- 
ganic welfare exercise no regulative influence, there seems no 
limit to the amount of disutiUty or illfare which may attach 
to the consumption of our national income. This appears, in- 
deed, to be the view of some of our social critics. Even those 
who do not go so far as Mr. Edward Carpenter in diagnosing 
civiHsation as a disease, yet assign to it a very wide departure 
from the true path of human progress. Indeed, it would be idle 
to deny that this income, not only in the terms of its distribution 
but also in its consumption, contains very large factors of waste 
and disutiUty, and that the higher, later elements carry larger 
possibilities of waste than the earHer. 

But this admission must not lead us to conceive of the so- 
called 'artificial' factors in a standard of consumption as the 
products, either of chance, or of some normal -perversity in the 
development of tastes which foists upon consumption elements 
destitute of human value. 

For there are two possibihties to bear in mind. The first is 
that even in the higher, less material, more 'artificial' ingre- 
dients of consumption, the test of 'survival value' may still in 
some measure apply. A too comfortable or luxurious mode of 
life may impair vitality, lessen the desire or capacity of parent- 
hood, or may introduce some inheritable defect injurious to the 
stock. Such results may follow, not merely from bad physical 
habits, but from what are commonly accounted good intellectual 
habits. For it is believed that the high cerebration of an intel- 
lectual fife is inimical to human fertility. Again, so far as sexual 
attractions determine marriage and parenthood, modes of living 
which either impair or overlay the points of attraction will con- 
tinue to be eliminated by natural selection. Habits of living, 
which damage either manliness or womanliness will thus continue 
to be curbed by Nature. 

But Nature may possess another safeguard of a more general 
efficacy. For any intelHgible theory of evolution, either of an 
individual organism or a species, involves the presence and opera- 
tion of some central power which, working either through par- 
ticular instincts, as in lower animals, or largely through a co- 



HUMAN UTILITY OF CONSUMPTION 119 

ordinating 'reason', as in man, not only conserves but develops. 
This organic purpose, or directive power, cannot be regarded as 
confined to mere physical survival, either of the individual or 
the species. It must also be considered as aiming at develop- 
ment, a fuller hfe for individual and species. Now the evolution 
of human wants and standards of consumption must be regarded 
as an aspect of this wider process of development. Whatever 
measure, then, of control be accorded to the central directive 
pov/er in organic development, must operate to determine eco- 
nomic wants and economic standards of life. If such directive 
action were infallible, securing, through the central cerebral con- 
trol, a completely economical poHcy of conservation and develop- 
ment, no problems of a distinctively social or moral character 
would arise. The existence of error, waste, sin, attests the falli- 
bihty of this directive power. Aiming to keep the individual 
and the species to hnes of conduct that are psycho-physically 
beneficial, its directions are either falsified or set aside by the 
force of some particular impulse or emotion, usurping or defying 
the central authority. The liabihty to such error and waste ap- 
pears to grow pari passu with organic development. As reason- 
ing man with his more complex life has more chances of going 
wrong than lower animals guided by instincts along a narrow 
life, so with each advance in the complexity of human life these 
chances of error multiply. The explanation of this expanding 
scope for error is not that reason is an inferior instrument to 
instinct. Even in matters of 'hfe and death', with which animal 
nature is primarily concerned, reason must be accounted in the 
main an improvement upon instinct. For though a particular 
instinct works more easily and accurately in an absolutely uni- 
form environment, reason deals more successfully with eccen- 
tricities and changes. Its esserftial quality is this superior adap- 
tiveness. Therefore, in handhng an environment, which not only 
is various and ever changing by its own nature, but is made more 
various and more changing by the interference of man, the human 
reason must work more successfully even for purposes of physical 
survival than any array of instincts could. In the struggle for 
a sufi&cient regular supply of food, or in the war against microbes, 
the rationaHsm of modern science and industry performs 'sur- 



120 WORK AND WEALTH 

vival ' work for which the exactitude of animal instinct is essen- 
tially unfitted. 

The view then that error and waste necessarily increase with 
the development of human society is not based upon any in- 
feriority of reason to instinct. It is due to the fact that, as hu- 
manity evolves further, a smaller proportion of its total energy 
is needed for mere survival, and a larger proportion is free for 
purposes of specific and individual progress. Now, the natural 
economy for survival, whether working by instinct or by reason, 
is far more rigorously enforced than the economy for progress. 
So long as the arts of industry are so crude as to absorb almost 
all the available work of man in provision for survival, the scope 
for waste is rigorously circumscribed. But as industry develops 
to a stage that yields a considerable 'surplus' beyond the needs 
for mere survival, the possibility of waste increases. For, then, 
it becomes possible for individuals, or groups within a community, 
to divert to purposes of excessive personal enjoyment the surplus 
of productive power which, 'economically' directed by Nature 
or Reason, would have served to raise the general level of well- 
being. 

The widest aspect of this phenomenon does not concern us 
here. It will be the subject of later commentary. We are here 
concerned only to explain why it is Hkely that, as wealth grows, 
waste also will grow, and why the higher standards of comfort 
in a nation or a class will contain a larger proportion of socially 
wasteful or injurious goods. Nature's guarantee of the sound 
organic use of the basic constituents of a standard of consump- 
tion does not extend with the same force to the conveniences, 
comforts and luxuries built upon this basis. Though one need 
not assume that no organically sound instinct of selection or 
rejection operates in the adoption of new comforts or luxuries, 
that natural safeguard must certainly be accounted weaker and 
less rehable. As we study presently the actual modes by which 
the higher ingredients are adopted into a class standard, we shall 
see that this assumption is borne out by experience, and that 
considerations of organic welfare play a rapidly diminishing part 
in determining the spread of most of the higher forms of material 
and intellectual consumotion. 



CHAPTER X 

CLASS STANDARDS OF CONSUMPTION 

§ I . We may now apply these general considerations regarding 
the evolution of wants to class and individual standards of con- 
sumption. In a concrete class standard of consumption we may 
conveniently distinguish three determinant factors: ist. The pri- 
mary organic factor, the elements in consumption imposed by 
general or particular conditions of physical environment, such 
as soil, chmate, in relation to physical needs. 2nd. The indus- 
trial factor, the modifications in organic needs due directly or 
indirectly to conditions of work. 3rd. The conventional factor, 
those elements in a standard of consumption not based directly 
upon considerations of physical or economic environment but 
imposed by social custom. 

So far as the first factor is concerned, we are for the most 
part in the region of material necessaries in which, as we have 
already seen, the organic securities for human utility are strong- 
est. Where any population has for many generations been set- 
tled in a locality, it must adapt itself in two ways to the physical 
conditions of that locality. Its chief constituents of food, cloth- 
ing, shelter, etc. must be accommodated to all the more perma- 
nent and important conditions of soil, climate, situation and of 
the flora and fauna of the country. A tropical people cannot be 
great meat-eaters or addicted to strong drinks, though the ma- 
terials for both habits may be abundant. An arctic people, on 
the other hand, must find in animal fats a principal food, and in 
the skins of animals a principal article of clothing. In a country 
where earthquakes frequently occur, the materials and structure 
of the houses must be light. In the same country the people of 
the mountains, the valleys, the plains, the sea-shores, will be 
found with necessary differences in their fundamental standard 
of consumption. It is, indeed, self-evident that physical envi- 
ronment must exercise an important selective and rejective 

121 



122 WORK AND WEALTH 

power represented in the material standard of consumption. 
So far as man can modify and alter the physical environment, 
as by drainage, forestry, or the destruction of noxious animals 
or bacteria, he may to that extent release his standard of con- 
sumption for this regional control. 

Primitive man, again, and even most men in comparatively 
advanced civiHsations, are confined for the chief materials of 
food, shelter and other necessaries, to the resources of their coun- 
try or locality. They must accommodate their digestions and 
their tastes to the foods that can be raised conveniently and in 
sufficient quantities in the neighbourhood : they must build their 
houses and make their domestic and other utensils out of the 
material products within easy reach. The early evolution of a 
standard of necessary consumption, working under this close 
economy of trial and error, appears to guarantee a free, natural, 
instinctive selection of organically sound consumables. 

The primary physical characteristics of a country, also of 
course, affect with varying degrees of urgency those elements in 
a standard of consumption not directly endowed with strong 
survival value, those which we call conveniences, comforts, 
luxuries. The modes and materials of bodily adornment, the 
styles of domestic and other architecture, religious ceremonies, 
forms of recreation, will evidently be determined in a direct man- 
ner by climatic and other physical considerations. 

Recent civilisation, with its rapid extensive spread of com- 
munications, and its equally rapid and various expansion of the 
arts of industry, has brought about an interference with this 
natural economy which has dangers as well as advantages. The 
swift expansion of commerce brings great quantities of foods 
and other consumables from remote countries, and places them 
at the disposal of populations under conditions which give no 
adequate security for organic utility of consumption. Under 
an economy of natural selection exotics are by right suspect, 
at any rate until time has tried them. The incorporation of 
articles such as tea and tobacco in our popular consumption has 
taken place under conditions which afford no proper guarantee 
of their individual utility, or against the bad reactions they may 
cause in the whole complex standards of consumption. 



CLASS STANDARDS OF CONSUMPTION 123 

The back stroke of this commercial expansion is seen in such 
occurrences as the deforestation of great tracts of country and 
the alteration of the cHmatic character, with its effects upon the 
lives of the inhabitants. 

But though certain errors and wastes attend these processes 
of commercialism and industriahsm, they must not be exagger- 
ated. There is no reason to hold that mankind in general has 
been so deeply and firmly speciaHsed in needs and satisfactions 
by local physical conditions that he cannot advantageously 
avail himself of the material products of a wider environment. 
Though the digestive and assimilative apparatus may not be 
so adaptable as the brain, there is no ground for holding that 
conformity during many generations to a particular form of 
diet precludes the easy adoption of exotic elements often con- 
taining better food-properties in more assimilable forms. A 
Chinese population, habituated to rice, can quickly respond in 
higher physical efficiency to a wheat diet, nor is the fact that 
bananas are a tropical fruit detrimental to their value as food for 
Londoners. 

How far the purely empirical way in which foods and other 
elements in a necessary standard have been evolved can be ad- 
vantageously corrected or supplemented by scientific tests, is a 
question remaining for discussion after the other factors in 
standards of consumption have been brought under inspection. 

§ 2. Industrial conditions, themselves of course largely de- 
termined by physical environment, affect class and individual 
consumption in very obvious ways. Each occupation imposes 
on the worker, and indirectly upon all the members of his family, 
certain methods of living. Physiological laws prescribe many 
of those methods. A particular sort of output of muscular or 
nervous energy demands a particular sort of diet to replace the 
expenditure. The proper diet of an agricultural labourer, a mill 
operative and a miner, will have certain recognised differences. 
Muscular and mental, active and sedentary, monotonous and 
interesting work, will involve different amounts and sorts of 
nourishment, and different expenditures for leisure occupations. 
These differences will extend both to the necessaries and the 
higher elements in standards of consumption. Industrial re- 



124 WORK AND WEALTH 

quirements will stamp themselves with more or less force and 
exactitude upon each occupation. An analysis of budgets would 
show that the standard of the clergyman was not that of the 
merchant or even of the doctor, and that the same family income 
would be differently applied. The stockbroker will not hve like 
the mill-owner, nor the journalist like the shopkeeper. So right 
through the various grades of workers. The skilled mechanic, 
the factory hand, the railway man, the clerk, the shop-assistant, 
the labourer, will all have their respective standards, moulded 
or modified by the conditions of their work : their needs and tastes 
for food, clothing, recreation, etc., will be affected in subtle ways 
by that work. 

'Productive' consumption is the term given by classical po- 
litical economy to that portion of consumption applied so as to 
maintain or improve the efficiency of labour-power in the worker 
and his family. Necessaries alone were held absolutely produc- 
tive, conveniences and comforts were dubious, luxuries were 
unproductive. Regarded even from the commercial standpoint, 
it was a shallow analysis, confined to a present utilisation of 
immediately useful commodities, and ignoring the reactions upon 
future productivity of a rise in education and refinement. It 
belonged to an age before the economy of high wages or the 
moral stimuH of hope and an intelligent outlook upon life had 
won any considerable recognition as 'productive' stimuli. 

But from the standpoint of our analysis the defect of this 
treatment is a deeper one. For us the distinction between pro- 
ductive and unproductive consumption is as fundamental as in 
the older economic theory. The difference lies in the concep- 
tion of the 'product' that is to give a meaning to 'productive'. 
Productive consumption, according to the older economic theory, 
was measured by the yield of economic productivity, according 
to our theory by the yield of vital welfare. The two not merely 
are not identical, they may often be conflicting values. 

A diet productive of great muscular energy for a navvy, 
foundryman or drayman, may produce a coarse type of animal- 
ism which precludes the formation of a higher nervous structure 
and the finer qualities of character that are its spiritual counter^ 
part. The industrial conditions of many productive employ- 



CLASS STANDARDS OF CONSUMPTION 125 

ments are notoriously such as to impair the physique and the 
muscle of the workers engaged in them, and there is no ground 
for assuming that the habits of consumption, conducing to in- 
creased productivity in such trades, carry any net freight of 
human utiHty. 

Nor is it only in manual labour that the industrial influences 
moulding a standard of consumption may damage its human 
quality. Much sedentary intellectual work involves similarly 
injurious reactions upon modes of Hving. The physical abuses 
of athleticism, stimulants and drugs, are very prevalent results 
of disordered competition in intellectual employments. But, 
as bad elements in standards of expenditure, the intellectual ex- 
cesses, the fatuous or degrading forms of Hterature, drama, art, 
music, which this life generates, are perhaps even more injurious. 
One of the heaviest human costs of an over-intellectual life to- 
day is its 'culture'. 

§ 3. When we come to 'conventional' elements in standards 
of comfort, we enter a region which appears to admit an indefi- 
nite amount of waste and error. 

The very term 'conventional', set as it is in opposition to 
'natural', indeed, suggests an absence of organic utility. We 
hear of 'conventional necessaries' even in the lowest levels of 
working-class expenditure. I presume that the expenditure in 
beer, tobacco, upon sprees or funerals, or upon decorative cloth- 
ing, would be placed in this category. 

From the purely economic standpoint such expenditure has 
been accounted either waste, or, even worse, 'disutility'. 

It is often argued that a labouring family on 21s. per week 
could be kept in physical efficiency, if every penny were expended 
economically in obtaining 'organic value'. This is the ideal of a 
certain order of advocates of thrift and temperance. Whole genera- 
tions of economists have accumulated easy virtue by preaching 
this rigorous economy for the v/orking-classes. It has always 
seemed possible to squeeze out of the standard of any working- 
class enough of the conventional or superfluous to justify the 
opinion that most of the misery of the poor is their own fault, 
in the sense that, if they made a completely rational use of their 
wages, they could support themselves in decency. The amount 



126 WORK AND WEALTH 

spent by the workers on drink alone would, it is often contended, 
make ample provision against most of the worst emergencies of 
working-class life. 

Now there are several comments to be made on this attitude 
towards conventional expenditure, i. As one ascends above the 
primary organic needs, the evolution of desires becomes less re- 
liable and more compHcated : the element of will and choice and 
therefore of choosing badly, becomes larger. Some condiments 
are useful for assisting the digestion of primary foods, but it is 
easier to make mistakes in condiments than in staple foods. So 
with all the higher and more complex wants. As one rises above 
the prime requisites and conveniences, organic instincts, or 
tastes directly dependent on them, play a diminishing part as 
faithful directors of consumption. This natural guidance does 
not indeed disappear. The evolution of a human being with 
finer nervous structure, and with higher intellectual and moral 
needs and desires related to that structure, is a fairly continuous 
process. The finest and best-balanced natures thus carry into 
their more complex modes of satisfaction a true psycho-physical 
standard of utility. But it is already admitted that the liability 
to go wrong is far greater in those modes of expenditure which 
are not directly contributory to survival. This is the case, 
whether individual tastes or some accepted convention determines 
the expenditure. 

This is so generally recognised that it is likely that the or- 
ganic utility of personal tastes on the one hand, custom and con- 
vention on the other, has been unduly disparaged. The temper 
of economists in assessing values has been too short-sighted and 
too inelastic. A good deal of personal expenditure that is waste- 
ful or worse when taken on its separate merits may be justified 
as a rude experimental process by which a person learns wisdom 
and finds his soul. What is true of certain freakish personal con- 
duct is probably true also of those conventional practices, in 
which whole societies or classes conduct their collective experi- 
ments in the art of living. 

A too rigorous economy, whether directed by instinct or reason, 
which should rule with minute exactitude the expenditure of 
individuals or societies, in order to extract from all expenditure 



CLASS STANDARDS OF CONSUMPTION 127 

of income the maximum of seen utilities, would be bound to sin 
against that law of progress which demands an adequate provi- 
sion for these experimental processes in life which, taken by them- 
selves, appear so wasteful. 

Social psychology brings a more liberal and sympathetic under- 
standing to bear upon some of the practices which to a short- 
sighted economist appear mere wasteful extravagance, destitute 
of utility and displacing some immediately serviceable consump- 
tion. Let me take some notable examples from current working- 
class expenditure. The lavish expenditure upon bank-holidays, 
in which large classes of wage-earners 'blow' a large proportion 
of any surplus they possess beyond the subsistence wage, is the 
subject of caustic criticism by thrifty middle-class folk. But 
may not this holiday spirit, with a certain abandon it contains, be 
regarded as a ' natural ' and even wholesome reaction against the 
cramping pressure of routine industrialism and the normal rigour 
of a close domestic economy? It may not, indeed, be an ideally 
good mode of reaction, may even contain elements of positive 
detriment, and yet may be the vent for valuable organic instincts 
seeking after those qualities of freedom, Joy and personal dis- 
tinction that are essential to a life worth living.^ 

Or take the gravest of all defects of working-class expenditure, 
the drink-bill. This craving, hostile as it is to the physical and 
moral life of man, is not understood, and therefore cannot be 
effectively eradicated, unless due account is taken of certain 
emotional imphcations. The yielding to drink is not mere brutal- 
ity. Brutes do not drink. It is in some part the response to an 
instinct to escape from the imprisonment in a narrow cramping 
environment which affords no scope for aspiration and achieve- 
ment. It may indeed be said that the drinker does not aspire 
and does not achieve. He is doubtless the victim of an illusion. 
But it is a certain dim sense of a higher freer life that lures him 
on. 'Elevation' is what is sought. 

'Kings may be blessed but Tarn was glorious 
O'er a' the ills o' life victorious. ' 

^ On the side of Consumption as of Production a progressive society that has not 
abandoned itself to excessive rationalism will recognise the desirability of keeping 
a scope for 'honne chance' and 'hazard'. Cf Tarde, I., p. 130. 



128 WORK AND WEALTH 

Or take still another item of working-class expenditure fre- 
quently condemned as a typical example of extravagance, the 
relatively large expense of funerals. Is this to be dismissed off- 
hand as mere wanton waste? A more human interpretation will 
find in it other elements of meaning. In the ordinary life of 
'the common people' there is little scope for that personal dis- 
tinction which among the upper classes finds expression in so 
many ways. The quiet working-man or woman has never for a 
brief hour through a long lifetime stood out among his fellows, 
or gathered round him the sympathetic attention of his neigh- 
bours. Is it wholly unintelligible or regrettable that those who 
care for him should wish to give this narrow, thwarted, obscure 
personality a moment of dignity and glory? The sum of life is 
added up in this pomp of reckoning, and the family is gathered 
into a focus of neighbourly attention and good-feehng, the out- 
ward emblems of honour are displayed, and a whole range of 
human emotions finds expression. Such excess as exists must be 
understood as a natural fruit of those aspiring qualities of per- 
sonality which, thwarted in their natural and healthy growth by 
narrowness of opportunity, crave this traditional outlet. 

In fact, the more closely we study the conventional factors in 
consumption, the less are we able to dismiss them out of hand as 
mere extravagance or waste. Some organic impulse, half physi- 
cal, half psychical, nearly always enters into even the least de- 
sirable elements. A margin of expenditure, either conventional 
or expressing individual caprice,^ which serves to evoke pleasure, 
to stir interest, and above all to satisfy a sense of personal dig- 
nity, even though at the expense of some more obvious and im- 
mediate utiUties, may be justified by considerations of individual 
and social progress. 

§ 4. Such considerations must not, however, be pressed very 
far in the defence even of the most firmly-rooted elements of 
conventional consumption. For, though the deeper organic 
forces which work through 'natural selection' must ehminate 

^ Though the term ' conventional ' appears formally to preclude the play of in- 
dividual taste or judgment, it is in fact only in such expenditures that these quali- 
ties obtain scope for expression. For though convention prescribes the general mode 
of such expenditure, it leaves a far larger scope for personal choice and capricious 
variation than in the more necessary elements of expenditure. 



CLASS STANDARDS OF CONSUMPTION 129 

the worst or most injurious modes of expenditure from the per- 
manent standard of a race or class, it may leave elements fraught 
with grave danger. For neither the animal nor the spiritual na- 
ture of man is equipped with a selective apparatus for testing 
accurately for purposes of organic welfare the innumerable fresh 
applicants for 'consumption' which appear as the evolution of 
wants, on the one hand, and of industries upon the other, becomes 
more complex and more rapid. An extreme instance will enforce 
my meaning. To take a Red Indian or a Bantu from a natural 
and social environment relatively simple and staple, and to 
plunge him suddenly into the swirl of a modern Western city Hfe 
is to court physical and moral disaster. Why? Because the 
pressures of animal desires or the emotions of pride and curiosity, 
which were regulated by effective 'taboos' in the primitive life 
from which he is drawn, now work their will unchecked. For 
the ' taboos ' of civiHsed society are both ill-adapted to the emo- 
tional texture of his nature, and in their novelty and complexity 
are not adequately comprehended. But even for those born and 
bred in the environment of a rapidly changing civiHsation there 
are evidently great hazards. Not only individual but widely 
collective experiments in novelties of consumption will often be 
injurious. This may be explained in the first instance as due to 
the perversion or defective working of the 'instincts' originally 
designed to protect and promote the life of the individual and 
the species. An animal hving upon what may be termed un- 
modified nature is possessed of instincts which make poisonous 
plants or animals repellent to its taste. A man Hving in a highly- 
modified environment finds such shreds of instinctive tastes as 
he possesses inadequate to the risk of rejecting the fabricated 
foods brought from remote quarters of the earth to tempt his 
appetite. If this holds of articles of food, where errors may be 
mortal and where some protection, however insufficient, is still 
furnished by the palate and the stomach, still more does it hold 
of the 'higher' tastes comparatively recently implanted in civil- 
ised man. 'Bad tastes' thus may introduce the use of books or 
art that disturb the mind without informing it, recreations that 
distract and dissipate our powers without recreating and restor- 
ing them. Nor does the ' social organism ' furnish reliable checks 



I30 WORK AND WEALTH 

which shall stop the spread of individual errors into conventional 
consumption. 

§ 5. The question of individual errors and wastes in the pro- 
cess of evolving standards of consumption must not detain us. 
For though it rightly falls within the scope of a fully elaborated 
valuation of consumption, it must not be allowed to intrude into 
our more modest endeavour to discuss the several grades of 
wants which comprise a class standard of consumption. The 
relative size of the wastes or defects of the conventional factors 
in a class standard will not indeed depend upon the mere addi- 
tion of the perversion of the separate choices of its individuals. 
For a convention is not produced by a mere coincidence of sep- 
arate actions of individual desire. 

It may be well here to revert to the distinction which we found 
convenient to employ in our analysis of the human value of 
different forms of work, viz. the distinction between creation and 
imitation. Here it will take shape in an enquiry as to the ways 
in which new wants are discovered and pass into conventional 
use. Let us take for an example the case of a medicine which has 
become a recognised remedy for a disease. Among animals or 
'primitive' man the habit of eating a curative herb may be re- 
garded as due to an organic instinct common to each member of 
the herd or group. Such consumption, however, would not really 
fall within the category of our 'conventional consumption'. It 
would in effect be confined to a limited number of articles con- 
taining strong elements of 'survival value', in a pre-economic 
period, though, as soon as tribal society began to evolve the med- 
icine man, his prescriptions would add many elements of waste 
and error. But the consumables whose origin we are now con- 
sidering must be regarded as involving invention or discovery, 
and conscious imitation or adoption by the group. Unless we 
suppose that the chewing of cinchona bark had a backing of in- 
stinctive adaptation, and so passed by tradition into later ages 
of Indian hfe, we must hold that the first beginnings of the use of 
quinine as a cure for intermittent fevers in South America were 
due either to chance or to early empiricism in treatment. Some 
person, probably enjoying distinction in his tribe, tried cinchona 
bark and recovered of his fever, others tried it upon this example 



CLASS STANDARDS OF CONSUMPTION 131 

and got benefit, and so the fame of the remedy spread first from 
a single centre, and afterwards from a number of other personal 
centres by conscious imitation. Or, similarly, take the adoption 
of some article of diet, such as sugar or tobacco, which is an ele- 
ment not of prime physical utility but of comfort or pleasure. 
The first men who chewed the sugar-cane, or tried the fumes of 
the herha nicotina, must be deemed to have done so 'by accident'. 
Liking the result, they repeated the experiment by design, and 
this personal habit become the customary habit of the group, 
moulded by a tradition continuously supported by a repetition 
of the feeHng which attended the first chance experience. 

Such accretions to a standard of consumption may be regarded 
as possessing guarantees of utiHty or safeguards against strong 
positive disutiHty in their method of adoption. They have grown 
into the conventional standard 'on their merits'. Those 'merits' 
may indeed be variously estimated from the 'organic' stand- 
point. Quinine has a high organic virtue, sugar perhaps an even 
wider but less vital virtue, while the virtue of tobacco may be 
purely superficial and compensated by considerable organic de- 
merits. But both discovery and propagation have been in all 
these cases 'natural' and 'reasonable' processes, in the plain or- 
dinary acceptation of these terms. Some actual utility has been 
discovered and recognised, and new articles thus incorporated 
in a standard of consumption, either for regular or special use, 
have at any rate satisfied a preliminary test of organic welfare. 

If all new habits of consumption arose in this fashion, and the 
prehminary test could be considered thoroughly reliable, the 
economy of the evolution of standards of consumption would be 
a safe and sound one. This hypothesis in its very form indicates 
the several fines of error discernible in the actual evolution of 
class standards. A falsification of the standard, involving the 
admission of wasteful or positively noxious consumables, may 
arise, either in the initial stage of invention, or in the process of 
imitative adoption. This will occur wherever the initial or the 
imitative process is vitiated by an extraneous motive. A very 
small proportion of medicines in customary use among primi- 
tive peoples have the organic validity of quinine. Most of them 
are 'charms', invented by medicine men, not as the result either 



132 WORK AND WEALTH 

of a chance or planned experiment, but as the work of an im- 
agination operating upon the lines of an empirical psychology, 
in which the relation of the actual or known properties of the 
medicine towards the disease play no appreciable part. So a 
whole magical pharmacopoeia will be erected upon a basis of 
totemist and animist beliefs, mingled with circumstantial mis- 
conceptions and gratuitous fabrications, and containing no or- 
ganic utility. Each addition or variant will begin as an artificial 
invention and will be adopted for reasons of prestige, authority 
or fear, carrying none of that organic confirmation which se- 
cured its position for quinine. The Hmit of error in such cases 
will be that the medicine must not frequently cause a serious 
and immediate aggravation of the suffering of the patient. The 
patent or ' conventional ' medicines among civilised peoples must 
be considered in the main as containing a falsification of stand- 
ard of the same kind, though different in degree. As the primi- 
tive medicine man, called upon to cure a fever or a drought, is 
primarily motived by the desire to maintain or enhance his per- 
sonal or caste prestige, while the adoption of his specific into a 
convention is due to a wholly irrational authority or to a wholly 
accidental success, so is it with a large proportion of modern rem- 
edies. Even in the orthodox branches of the medical profession 
the process of converting vague empiricism into scientific ex- 
periment has gone such a Httle way as to furnish no guarantee 
for the full organic efficacy of many of the treatments upon 
which the patient public spends an increasing share of its in- 
come. But as regards the profession there is at any rate some 
basis of confidence in the disinterested application of science to 
the discovery of genuine organic utility. 

In the patent medicine trade there is very little. Here we 
have a condition very little better than that of the power of the 
witch-doctor in primitive society. The maxim ^caveat emptor^ 
carries virtually no security, for the guidance of the palate is 
ruled out, while the test of experience, except for purgation or 
for some equally simple and immediate result, is nearly worthless. 

§ 6. When the invention and propagation of a mode of con- 
sumption have passed into the hands of a trade, the guarantees 
of organic utility, the checks against organic injury, are at their 



CLASS STANDARDS OF CONSUMPTION 133 

weakest. For neither process is directed, either by instinct or 
reason, along serviceable channels. Where the commercial mo- 
tive takes the initiative, there can be no adequate security that 
the articles which pass as new elements into a standard of con- 
sumption shall be wealth, not illth. Where an invention is stim- 
ulated to meet a genuinely 'long-felt need', the generality and 
duration of that need may be a fair guarantee of utility. But 
this is not the case where the supply precedes and evokes the 
demand, the more usual case under developed commercialism. 
Neither in the action of the inventor, nor in the spread of the 
new habit of consumption, is there any safe gauge of utility. 
The inventor, or commercial initiator, is only concerned with the 
question. Can I make and sell a sufficient quantity of this article 
at a profit? In order to do so, it is true, he must persuade enough 
buyers that they 'want' the article and 'want' it more than 
some other articles on which they otherwise might spend their 
money. To unreflecting persons this, no doubt, appears a suffi- 
cient test of utility. But is it? The purchaser must be made to 
feel or think that the article is 'good' for him at the time when 
it is brought before his notice. For this purpose it must be en- 
dowed with some speciously attractive property, or recommended 
as possessing such a property. A cheap mercerised cotton cloth, 
manufactured to simulate silk, sells by its inherent superficial 
attraction. A new line in drapery 'pushed' into use by the re- 
peated statement, false at the beginning, that 'it is worn', illus- 
trates the second method. In a word, the arts of the manufac- 
turer and of the vendor, which have no direct relation whatever 
to intrinsic utility, overcome and subjugate the uncertain, un- 
trained or 'artificially' perverted taste of the consumer. Thus 
it arises that in a commercial society every standard of class 
comfort is certain to contain large ingredients of useless or nox- 
ious consumption, articles, not only bad in themselves, but often 
poisoning or distorting the whole standard. The arts of adulter- 
ation and of advertising are of course responsible for many of 
the worst instances. A skilled combination of the two processes 
has succeeded in cancelling the human value of a very large pro- 
portion of the new increments of money income in the lower 
middle and the working-classes, where a growing susceptibiHty 



134 WORK AND WEALTH 

to new desires is accompanied by no intelligent checks upon the 
play of interested suggestion as to the modes of satisfying these 
desires. 

Where specious fabrication and strong skilled suggestion co- 
operate to plant new ingredients in a standard of consumption, 
there is thus no security as to the amount of utility or disutihty 
attaching to the 'real income' represented by these 'goods'. 
But this vitiation of standards is not equally appHcable to all 
grades of consumption, or to all classes of consumers. Some 
kinds of goods will be easier to falsify or to adulterate than others, 
some classes of consumers will be easier to 'impose upon' than 
others. These considerations will set limits upon the amount of 
waste and ' illth ' contained in the goods and services which com- 
prise our real income. 

First, as to the arts of falsification. Several laws of limitation 
here emerge. Some materials, such as gold and rubber, have no 
easily procurable and cheaper substitutes for certain uses. Other 
goods are in some considerable degree protected from imitation 
and adulteration by the survival of reliable tests and tastes, touch 
and sight, in large numbers of consumers. This appHes to simpler 
sorts of goods whose consumption is deepest in the standard and 
has a strong basis of vital utihty. It will be more difiicult to adul- 
terate bread or plain sugar to any large extent than sauces or 
sweets: it will be easier to fake photographs than to pass off 
plaice for soles. But it cannot be asserted as a general truth that 
the necessaries are better defended against encroachments of 
adulteration and other modes of deception than conveniences, 
and conveniences than luxuries. Indeed, there are two consider- 
ations that tell the other way. A manufacturer or merchant 
who can palm off a cheaper substitute for some common neces- 
sary of life, or some well-established convenience, has a double 
temptation to do so. For, in the first place, the magnitude and 
reliability of the demand make the falsification unusually profit- 
able. In the second place, so far as a large proportion of articles 
are concerned, he can rely upon the fact that most consumption 
of necessaries hes below the margin of clear attention and criti- 
cism. Except in the case of certain prime articles of diet, it is 
probable that a consumer is more likely to detect some change 



CLASS STANDARDS OF CONSUMPTION 135 

of quality in the latest luxury added to his standard than in the 
habitual articles of daily use, such as his shoe-leather or his soap. 
In fact, so well recognised is this protection afforded to the seller 
by the unconsciousness which habit brings to the consumer, 
that, in catering for quite new habits, such as cereal breakfast 
foods or cigarettes, the manufacturer waits until the original 
attractions of his goods have stamped themselves firmly in cus- 
tomary use, before he dares to lower the quality or reduce the 
quantity. 

These considerations make it unlikely that we can discover 
a clear law expressing the injury of commercialism in terms of 
the greater or less organic urgency of the wants ministered to 
by the different orders of commodities. It will even be difficult 
to ascertain whether the arts of adulteration or false substitu- 
tion play more havoc among the necessaries than among the 
luxuries of life. In neither is there any adequate safeguard for 
the organic worth of the articles bought and sold, though in both 
there must be held to be a certain presumption favourable to 
some organic satisfaction attending the immediate act of con- 
sumption. If a ' law ' of falsification can be found at all, it is more 
likely to emerge from a comparative study not of necessaries, 
conveniences, comforts and luxuries, in a class standard, but of 
the various sorts of satisfactions classified in relation to the needs 
which underhe them. Where goods are consumed as soon as 
they are bought, and by some process involving a strong appeal 
to the senses, there is less chance for vulgar fraud than v/here 
consumption is gradual or postponed, and is not attended by 
any moment of vivid realisation. Other things equal, one might 
expect more easily to sell shoddy clothing than similarly damaged 
food: the adulteration of a jerry-built house is less easily detected, 
or less adequately reprobated, than that of a jerry-built suit of 
clothes. 

Along similar lines we might, in considering non-material 
consumption, urge that there are more safeguards for utihty in 
the expenditure upon books or music-hall performances than 
upon education or church membership. And in a sense this is 
true. If I buy a book or attend a concert, I am surer to get 
what I regard as a quid pro quo for my expenditure than in the 



136 WORK AND WEALTH 

case of a prolonged process involving many small consecutive 
acts. 

So far as this is true, it means that relics of organic guidance 
are more truly operative in some kinds of satisfaction than in 
others, and furnish some better check upon the deception which 
commerciahsm may seek to practise. But, of course, our valua- 
tion of such checks will depend upon how far we can accept them 
as reliable tests, not of some short-range immediate satisfaction, 
but of the wider individual and social welfare. The fact that so 
many notoriously bad habits can be acquired by reason of an 
immediate 'organic' attractiveness that is a false clue to the 
larger welfare, must put us on our guard against accepting any 
easy law based on the test of 'natural' tastes. 

§ 7. But, in considering the degradation of standards of con- 
sumption, it is well to bring some closer analysis to bear upon the 
processes of suggestion and adoption that are comprised in 'imi- 
tation'. In analysing the forms of wealth, the goods and ser- 
vices, which are the real income of the nation, in terms of their 
production, we recognised that, other things equal, the human 
cost of any body of that wealth varied directly with the amount 
of routine or purely imitative work put into it, and inversely 
with the amount of creative or individual work. That judgment, 
however, we felt bound to qualify by the consideration that a 
certain proportion of routine work, though in itself perhaps dis- 
tasteful and uninteresting, had an organic value both for the 
individual and for society. How far can we apply an analogous 
judgment to the same body of Wealth on its consumption side? 
Can we assume that the utility of consumption of any given 
body of wealth varies directly with the amount of free personal 
expression which its use connotes, and inversely with the routine 
or conventional character it bears? Evidently not. The same 
analysis does not apply. The chief reason for the difference has 
already been indicated, by pointing out that, in a modern in- 
dustrial society, each man, as producer, is highly speciaUsed, as 
consumer highly generalised. The high human costs of routine 
work were, we saw, a direct result of this specialising process. 
A little routine work of several sorts, regularly practised, would 
involve no organic cost, and might indeed yield a fund of posi- 



CLASS STANDARDS OF CONSUMPTION 137 

tive utility as a wholesome regime of exercise, provided it was not 
carried so far as to encroach upon the fund of energy needed for 
the performance of other special work, creative and interesting. 

Indeed, the usual economic justification of the excessive divi- 
sion of labour existing at present in advanced industrial societies 
is that it is essential to yield that large body of objective wealth 
which, by its distribution, enriches and gives variety to the con- 
sumption of all members of the society. The producer is sacri- 
ficed to the consumer, the damage done to each man in his former 
capacity being more than compensated by the benefits conferred 
upon him in his latter capacity. 

The full validity of this doctrine will be considered when we 
gather together the two sides of our analysis and consider the 
inter-relations between production and consumption as an as- 
pect of the problem of human values. At present we may begin 
by accepting variety of consumption as a condition in itself fa- 
vourable to the maximisation of human welfare. This assump- 
tion is not, however, quite self-evident. The routine factors 
in a standard of consumption (and a standard qua standard 
consists of routine) , so far as they are laid down under the direc- 
tion of an instinctive or a rational evolution of wants, must be 
regarded as containing a minimum of waste or disutihty. Since 
they are also the foundation and the indispensable condition for 
all the 'higher' forms of material or non-material consumption 
in which the conscious personahty of individuals finds expression, 
they may be held to contain per unit a maximum of human value. 
From this standpoint there would seem to emerge a law of the 
economy of consumption, to the effect that the maximum of so- 
cial welfare would be got from a distribution of wealth which 
absorbed the entire product in this routine satisfaction of the 
common needs of life. This economy need not be conceived 
merely in terms of a uniform standard of material satisfactions. 
A wider interpretation of life and of necessaries might extend it 
so as to cover many higher grades of satisfaction, all the 'joys 
that are in widest commonalty spread.' The natural evolution 
of such an economy of consumption might, it is arguable, yield 
the greatest quantity of social welfare. 

§ 8. But a high uniform level of welfare throughout society 



138 WORK AND WEALTH 

does not exhaust the demands of human welfare. It evidently 
overstresses the Hfe of the social as against the individual or- 
ganism, imposing a regimen of equality which absorbs the many 
into the one. Now, desirous to hold the balance fair between 
the claims of individual personality and of society, we cannot 
acquiesce in an ideal of economical consumption which makes 
no direct provision for the former. So far, however, as the con- 
sumption of an individual is of a routine character, expressing 
only the needs of a human nature held in common with his fel- 
lows, it does not really express his individuahty at all. The real- 
isation of the unique values of his personality, and the conscious 
satisfaction that proceeds from this individual expression, can 
only be got by activities which lie beyond the scope of custom 
and convention. Though this issue has most important bearings 
that are outside the economic field, it is also vitally connected 
with the use of economic goods. For, unless a due proportion 
of the general income (the aggregate of goods and services) is 
placed at the free disposal of individuals in such forms as to nour- 
ish and stimulate the wholesome and joyous expansion of their 
powers, that social progress which first manifests itself in the 
free experimental and creative actions of individuals whose 
natures vary in some fine and serviceable way from the common 
Kfe, will be thwarted. This brings us to a better understanding 
of the nature and origin of the human injury and waste contained 
in large sections of that conventional consumption which plays 
so large and so depressing a part in every class standard of com- 
fort. Where the production of an economic society has grown 
so far as to yield a considerable and a growing surplus beyond 
that required for survival purposes, this surplus is liable to sev- 
eral abuses. Instead of being applied as food and stimulus to 
the physical and spiritual growth of individual and social life, 
it may be squandered, either upon excessive satisfaction of ex- 
isting routine wants in any class or classes, or in the stimulation 
and satisfaction of more routine wants and the evolution of a 
complex conventional standard of consumption, containing in 
its new factors a diminishing amount of human utility or even 
an increasing amount of human costs. If the industrial struc- 
ture is such that particular groups of business men can make 



CLASS STANDARDS OF CONSUMPTION 139 

private gains by stimulating new wasteful modes of conventional 
consumption, this process, as we have seen, is greatly facilitated. 

But, after all, the business motive is not in itself an adequate 
explanation. Business firms suggest new wants, but the sus- 
ceptibility to such suggestions, the active imitation by which 
a new article passes into the conventional consumption of a group 
or class, requires closer consideration. Falsification of a standard 
can seldom be understood as a mere perversion of the free choice 
of individuals. A convention is not produced by a mere coinci- 
dence of separate choices. Imitation plays an important part in 
the contagion and infection of example. In endeavouring to as- 
sess the human utility of the consumption of wealth we see the 
play of several imitative forces. Current Prestige, Tradition, 
Authority, Fashion, Respectability supplement or often displace 
the play of individual taste, good or bad, in moulding a class 
and family standard of consumption. The psychology and 
sociology of these distinctively imitative forces which form or 
change standards are exceedingly obscure. 

The merely gregarious instinct may lead to the spread in a 
class or group of any novelty which attracts attention and is not 
offensive. Where supported by any element of personal pres- 
tige, such novelty, irrespective of its real virtues or uses, may 
spread and become embedded in a standard of consumption. 
The beginnings of every fashion largely belong to this order of 
imitation. Some prestige is usually needed fairly to launch a 
new fashion; once launched it spreads mainly by 'gregarious- 
ness', the instinct to be, or look, or act, like other people. The 
limits of error, disutility or inconvenience, which can be set upon 
a novelty of fashion, appear to depend mainly upon the initial 
force of prestige. The King might introduce into London so- 
ciety a really inconvenient high hat, though the Queen perhaps 
could not carry a full revival of the crinoline. 

Fashions change but they leave deposits of conventional ex- 
penditure behind. What is at first fashionable often remains as 
respectable and lives long in the conventional habits of a class. 
Every class standard is encrusted with little elements of dead 
fashion. 

§ 9. But this formative influence of Prestige itself demands 



I40 WORK AND WEALTH 

fuller consideration. For it not merely implants elements of 
expenditure in the standard of consumption, but infects the 
standard itself. 

A true standard would rest on a basis of organic utility, ex- 
penditure being apportioned so as to promote the soundest, full- 
est human life. But all conventional consumption is determined 
largely by valuations imposed by the class possessing most pres- 
tige. It is, of course, a commonplace that fashions in dress, and 
in certain external modes of consumption, descend by snobbish 
imitation from high Hfe through the different social strata, each 
class copying the class above. It is a matter of far more vital 
importance that rehgion, ethics, art_, literature and the whole 
range of intellectual activities, manners, amusements, take their 
shapes and values largely by the same process of infiltration from 
above. 

This is not the case everywhere. In many nations the dis- 
tinctions of caste, class, locality or occupation, are so strong as 
to preclude the passage of habits of material consumption, man- 
ners, tastes and ideas, from one social stratum to another. The 
exclusive possession of a code of life, of language, thought and 
feelings by a caste or class, is itself a matter of pride, and often 
of legal protection. This holds not only of most Asiatic civilisa- 
tions but, though less rigorously, of those European countries 
which have not been fully subjected to the dissolving forces of 
industrialism. 

But in such countries as England and the United States, where 
the industrial arts are rapidly evolving new products and stim- 
ulating new tastes, and where at the same time the social strata 
present a continuous gradation with much movement from one 
stratum to another, the process of imitation by prestige is very 
rapid and general. 

The actual expenditure of the income of every class in these 
countries is very largely determined, not by organic needs, but 
by imitation of the conventional consumption of the class im- 
mediately above in income or in social esteem. That conven- 
tional consumption in its turn is formed by imitation of the class 
above. The aristocracy, plutocracy, or class with most power or 
prestige, thus makes the standards for the other classes. 



CLASS STANDARDS OF CONSUMPTION 141 

Now, even if it were a real aristocracy, a company of the best, 
it by no means follows that a standard of Hving good for them 
would be equally good for other social grades. But there would 
be at least a strong presumption in its favour. To copy good ex- 
amples, even if the cop3ang is defective, is an elevating practice, 
and in as much as the essentials of humanity are found alike in 
all, thoughtless imitation of one's betters might raise one's own 
standard. If in a society the men of light and leading occupied 
this place because they had discovered a genius for the art of 
noble living, the swift unconscious imitation of their mode of 
Hfe, the morals and manners of this aristocracy, would surely be 
the finest schooling for the whole people: the models of the good, 
the true, the beautiful, which they afforded, would inform each 
lower grade, according to its capacity. 

But where the whole forces of prestige and imitation are set 
on a sham aristocracy, cop3dng as closely as possible their modes 
of consumption, their ways of thought and feeling, their valua- 
tions and ideals, incalculable damage and waste may ensue. For 
the defects in the standard of the upper few will, by imitation, 
be magnified as well as multiplied in the lov/er standards of the 
many. Let me illustrate. 

If gambling is bad for the upper classes, its imitation becomes 
progressively worse as it descends, poisoning the life and con- 
suming a larger proportion of the diminishing margin of the in- 
come of each class. If the inconvenience of decorative dress is bad 
for rich women, who hve a life of ease and leisure, its imita- 
tion by the active housewives of the middle, and the women- 
workers of the lower classes, inflicts a graver disutihty. For the 
waste of income is more injurious and the physical impediments 
to liberty of movement are more onerous. It is the immeasur- 
able importance of this prestige of the upper class, percolating 
through all lower social grades, and imposing, not merely ele- 
ments of conventional consumption, but standards and ideas of 
Hfe which affect the whole mode of living, that requires us to 
give closer consideration to the life of the leisure class. 

§ 10. Here we can find valuable aid in a remarkable book en- 
titled The Theory of the Leisure Class, by Mr. Veblen, an Ameri- 
can sociologist. Regarded as a scientific study, which it rightly 



142 WORK AND WEALTH 

claims to be, this book has two considerable defects, one of 
manner, one of matter. Its analysis is conducted with a half- 
humorous parade of pompous terminology apt to wear upon the 
temper of the reader. Its exaggerated stress upon a single strain 
of personality, as a dominant influence in the formation of habits 
and the direction of conduct, is a more serious blemish in a work 
of profound and penetrating power. But for our present purpose, 
that of discovering the elements of waste in national consumption, 
it is of first-rate importance. 

Mr. Veblen's main line of argument may be summarised as 
follows. In primitive society war and the chase will be the chief 
means by which men may satisfy that craving for personal dis- 
tinction and importance which is the most enduring and impor- 
tunate of psychical desires. Personal prowess, mainly physical, 
displayed in fight or hunt, will secure leadership or ascendency 
in tribal life. So those trophies which attest such prowess, the 
skulls or scalps of enemies, the skins of slain animals, or the live 
possession of tame animals, will be the most highly-prized forms 
of property. When the capture and enslavement of enemies has 
taken the place of promiscuous slaughter, the size and variety 
of his retinue of slaves for personal service, concubinage, or 
merely decorative show, attest the greatness of the warrior-chief. 
When the industrial arts are sufficiently developed, slaves will 
be set to produce such other forms of property, enlarged housing, 
quantities of showy garments, cultivated fields, herds of cattle, as 
afford conspicuous evidence of the personal prowess of the chief. 
Glory, far more than utility or comfort, continues to be the dom- 
inant motive. 

As civiHsation begins to make way, the notion of what consti- 
tutes personal prowess begins to be modified. Though physical 
force may still remain a chief ingredient, skill and cunning, wis- 
dom in counsel, capacity for command and law-making, come to 
be recognised as also giving prestige. As not only the strong man 
by his strength, but the cunning man by his cunning, can get 
that wealth or property which are the insignia of prowess, prop- 
erty will however still be valued by its owner mainly for the 
prestige it affords him among his fellows. It will still for the 
most part take shape in external forms of adornment or magnifi- 



CLASS STANDARDS OF CONSUMPTION 143 

cence. As it develops into the culminating form of the oriental 
court, the element of display wiU remain the paramount consid- 
eration, to which even the sense-enjoyments of the owner will be 
secondary. 

The effect of this early linking of property to personal prowess 
will be that in the general mind of man the possession of prop- 
erty is honorific. It secures for its owner a presumption of per- 
sonal greatness. Therefore, its possession must be kept in full 
and constant evidence, especially where inheritance destroys the 
direct presumption of the personal prowess of the actual owner. 
Hence the two essential features of the mode of living of the dom- 
inant class or caste, ostentatious waste and conspicuous leisure. 
For thus the prestige of property is best enforced. Gorgeous 
palaces with luxurious grounds, magnificent banquets and enter- 
tainments, extravagant refinements of sensual luxury, adorn- 
ments of fabrics, jewels and articles of laborious skill, magnificent 
tombs and other monuments — the elaborate parade of waste, 
in order to fasten on the common imagination the sense of wonder 
and of admiration of the person who could afford so lavish a 
waste! The family of the rich man is chiefly valued as an in- 
strument for making this display effective. His wife or wives 
must do no work, not even copy his parasitic activities; they must 
stand as open monuments of conspicuous leisure, their personal 
adornments, their retinues of servants, the entire elaborate 
ritual of their futile lives, must be devoted to showing how much 
their possessor can afford to waste. Such was the Hfe of the aris- 
tocracy in olden and mediaeval days! 

It has passed in most essentials, by tradition and imitation, 
to the life of the upper class in modern civilised nations. The 
modes and conceptions of personal prowess and prestige have in- 
deed shifted. The man of business has dethroned the warrior 
or the poUtical chieftain. The typical great man of our time is 
the great entrepreneur, the financier who directs the flow of capi- 
tal and rules prices on change, the railway or shipping magnate 
who plans a combine, the able and astute merchant, who con- 
trols a market, the manufacturer who conducts a great produc- 
tive business, the organiser of a successful departmental store. 
The personal qualities and activities involved in these tasks are 



144 WORK AND WEALTH 

very different from those possessed by barbarian chieftains or 
oriental despots. Add to such men the surviving landed aristo- 
cracy of rent-receivers, and a considerable number of families that 
Kve on dividends, taking no real part in the administration of 
industry, and we have a synopsis of the class which to-day wields 
prestige. Though the elaboration of modern arts of pleasure 
directs a great part of the expenditure of this, our upper class, 
the traditional habits of ostentatious waste and conspicuous 
leisure as modes of glory are still paramount motives. Most 
rich people value riches less for the pleasures they afford than for 
the social consideration, the personal distinction, they procure. 
The craving to reaHse superiority over others, as attested by 
their serviHty or imitation, the power of money to make others 
do your will, the sense of freedom to realise every passing ca- 
price, these remain the chief value of riches, and mould the valua- 
tions of life for the bulk of the well-to-do. 

Such are the inevitable effects of easily-gotten and excessive 
wealth upon the possessors. So far as they operate, they in- 
duce futile extravagance in expenditure. Instead of making for 
utility, they make for disutihty of consumption. Such is the 
gist of this analysis of the leisured life. 

§ II. Expenditure which is to be effectively ostentatious, so 
as to impress its magnificence upon the largest number of other 
people, cannot be directed to the satisfaction of a real personal 
want, even a bad want. Futihty is of its essence. The very 
type of this expenditure is a display of fireworks: there is no 
other way of consuming so large a quantity of wealth in so short 
a time with such sensational publicity and with no enduring ef- 
fect whatever. This private extravagance may perhaps be par- 
alleled in public expenditure by the squandering of millions upon 
war-ships which are not needed, will never be used, and will be 
obsolete within a few years of their construction. 

The defects which every sane social critic finds in the modes 
of living of the rich, their frivolity, triviality and futility, are il- 
lustrations of Mr. Veblen's thesis. Perhaps the largest complex 
of forms of futile waste, waste of money and of time, is con- 
tained in the performance of what, with curious aptness of 
phrase, are termed 'social duties', the idle round of visits, enter- 



CLASS STANDARDS OF CONSUMPTION 145 

tainments and functions which constitutes the 'society life'. I 
speak of the aptness of the term 'social duties'. This is no par- 
adox, but merely the finest instance of that perversion of values 
and valuations which is inherent in the situation. For it is es- 
sential to the accuracy of this analysis that the rich members of 
society should regard their most futile activities as ' duties ', and 
their small section of humanity as 'society'. 

Of the expenditure which is laid out on the satisfaction of 
material wants, the waste or disutihty will often be considerable. 
But Nature is strong enough to enforce some sense and modera- 
tion in the satisfaction of primary organic desires. While, there- 
fore, there is much luxury and waste in the material standard 
of comfort of the rich, we do quite wrong to find in food and 
clothing and other material consumption our chief instances of 
luxury and waste. It is in the non-material expenditure that 
the proportion of waste or disutihty is largest. The great moral 
law, corruptio optimi pessima, requires that this be so. If we 
seek the largest sources of injurious waste in the standard of the 
well-to-do classes, we shall find them in the expenditure upon 
recreation, education and charity. 



CHAPTER XI 

SPORT, CULTURE AND CHARITY 

§ I . It is no mere chance that makes sport the special field for 
the attainment and display of personal prestige among the well- 
to-do classes. Primitive man in his early struggle for life had 
to put all his powers of body and mind, all his strength and cun- 
ning, into the quick, sure, and distant discovery of beasts or 
other men who would destroy him. He must pursue and kill 
them, or successfully avoid them. He must seek out animal or 
vegetable foods, tracking them by signs and snares, rapid of 
foot, keen of eye and scent, quick, strong, and accurate of grasp. 
To run and spring, to climb and swim and strike and throw were 
necessary human accomplishments. They had a high survival 
value. Nature had to evolve and maintain a man who had the 
capacity to do these things well, and who was wilUng to undergo 
the necessary toil and pain of acquiring and exercising these arts 
and crafts. To ride, to shoot, to manage boats, were occupa- 
tions of prime utihty. Successful mating was also necessary for 
survival, and so the arts of courtship, dancing, music, decoration, 
and various displays of grace and vigour were evolved. The 
simple activities that were elaborated into these arts of hunting, 
fighting, mating, were instinctive, and strong feelings of pleasure 
were attached to them, as Nature's lure. When reason, or con- 
scious cunning, came to cooperate with instinct, complicating 
and refining the useful arts, the specific pleasures of instinctive 
satisfaction were accompanied by a general sense of personal ela- 
tion or pride. Now, in man, as in other animals, practice was 
needed for the successful performance of these useful activities. 
This practice takes the form of play, a more or less realistic sim- 
ulation of the practices of fighting, hunting, courtship, in which, 
hov/ever, considerable scope exists for variations and surprises, 
the survival value of which is real, though indirect. Since these 
forms of play appeal to and exercise the same activities as are 

146 



SPORT, CULTURE AND CHARITY 147 

involved in the serious afifairs of life, the same sorts of satisfac- 
tion are attached to them. The natural meaning of play is 
that it is a preparation for work, i. e. for the arduous, painful, 
and often dangerous tasks involved in 'the struggle of life,' and 
the pleasure of play is the inducement to the acquisition of this 
useful skill, 

§ 2. If this be so, it may be possible for some men to suck the 
pleasure from the play without performing the useful work for 
which it is a preparation. The play instincts can be made to 
yield a desirable life of interest and pleasure to any class of men 
who are enabled to get others to perform their share of useful 
work, and thus to provide them with the time, energy and ma- 
terial means for the elaboration of the play side of life. Such 
is the physical explanation of the sportsman. The play which 
Nature designed as means to life, he takes as an end, and lives 
'a. sporting life'. Some of his sports bear on the surface few 
signs of biological play about them. The manual and mental 
dexterity of such indoor games as bridge and billiards, appear 
quite unrelated to the arduous pursuits of mountaineering or 
big-game hunting. Between these two He the great majority of 
active sports, such as shooting, racing, and the various games of 
ball. No one who analyses carefully the feelings of pleasure got 
from a boundary hit, a run with the ball, a neck-to-neck race, 
or any other athletic achievement, can doubt their nature. 

Fighting, hunting, fishing, climbing, exploring, reduced to 
sports, contain just as much 'reaHsm' as is needed to evoke the 
pleasurable excitement which sustained these skilful efforts when 
they belonged to the struggle for life. Some of the imitations 
may be so close to reality as to recall in almost its full intensity 
the primal thrill, as in tiger-stalking, in boxing, or rock climbing. 
In ball-games the fictitious circumstances call for more imagina- 
tion, though the pleasure of the actual stroke is chiefly a race 
memory of a blow struck at an enemy, or of a blow warded off. 
No one can doubt the nature of the fierce pleasure of the football 
scrimmage with its mortal make-believe. 

Although in many sports some element of physical risk is 
needed to sustain the realism, it is usually reduced to trifling 
dimensions. This is also true of the painful endurance inci- 



148 WORK AND WEALTH 

dental to the primitive struggle. The modern sportsman or 
explorer commonly devises ways of economising both his per- 
sonal risk and his personal effort. Beaters find the animal or 
bird for him to shoot; native porters and guides carry food for 
him, and ease his path. His object is to secure the maximum 
pleasure of achievement with the minimum risk and effort. Per- 
haps the most highly-elaborated example is the playful revival 
of the migratory and exploring instincts, from the picnic to the 
world-tour, with the complex apparatus of pleasure-travel which 
occupies so large a part in the life of the well-to-do classes. The 
luxurious life of travel in which the motor-car, the train de luxe, 
or the yacht carries men and women from the gorgeous hotel of 
one beauty spot to that of another, is made pleasurable or tol- 
erable by waking up the dim shadow of some wandering ances- 
tor, whose hunting or pastoral habits required some satisfaction 
to evoke the life-preserving effort. Camping-out and caravan- 
ning are somewhat more realistic reproductions, bringing in more 
of the gregarious or corporate instinct of the tribe. 

How subtle are the artifices by which human cunning seeks 
to exploit the past is best illustrated, however, in the purely 
spectatorial or sympathetic surroundings of sport. To play 
football is one remove from battle, to watch the game is two 
removes, to watch the "tape" or follow the scores in the news- 
papers is three removes. Yet millions of little thrills of satisfac- 
tion are got from this simulation of a simulated fight. Blended 
in various degrees with other zests, of hazard, of petty cunning, 
and avarice, where betting enters into sport, the sporting inter- 
est ranks highest of all in the scale of values among the able- 
bodied males of all classes in English-speaking peoples. 

Added to the pleasure from the output of strength or skill in 
sport is the general sentiment of exultation, the sense of glory. 
To what must that be attributed? Not to the magnitude of the 
strength or skill. A navvy may display greater strength or en- 
durance in his work, a trapper or a common fisherman a finer 
skill in catching his prey. But the true glory of sportsmanship 
is denied them. Why? Because their work is useful, and they 
are doing it for a living. The glory of the successful sportsman 
is due to the fact that his deeds are futile. And this conspicuous 



SPORT, CULTURE AND CHARITY 149 

futility is at the root of the matter. The fact that he can give 
time, energy, and money to sport testifies to his possession of 
independent means. He can afford to be an idler, and the more 
obviously useless and expensive the sport, the higher the pres- 
tige attaching to it. His personal glory of strength, endurance, 
or skill is set in this aureole of parasitism. The crucial test of 
this interpretation is very simple. Let it turn out that a Mara- 
thon winner, who seemed to be a gentleman, was really a pro- 
fessional, what a drop in his personal prestige ! The professional 
is a man who has to earn a living, his reputation as a sportsman 
is damaged by that fact. Can there be any more convincing 
proof that the high prestige of sport is due to the evidence of 
financial prowess which it affords? 

The hunting and the fighting instincts evidently underhe the 
pleasure of nearly all the exclusively male sports. Doubtless 
other instinctive satisfactions enter in, such as the gregarious 
instinct with its conscious elaboration of esprit de corps. When- 
ever any game or sport brings the sexes into relation with one 
another, the mating instincts are evidently involved. The cross- 
ing of war with sex in the theory and practice of chivalry was a 
conscious and artistic blending of these pleasure motives. 

But this treatment of sport as a frivol6us pursuit of pleasure 
ignores one important aspect. Sport, it will be urged, after all 
has health for its permanent utility. It is exercise for the body 
and diversion for the mind. It wards off the natural conse- 
quences of the purely parasitic life, which a private income ren- 
ders possible, by providing work-substitutes. The primal law, 
'in the sweat of thy face shalt thou eat bread,' is gracefully 
evaded by games that include a gentle perspiration. Golf may 
take the place of spade-labour to win appetite and digestion; 
bridge will save the brain from absolute stagnation. So Nature's 
self-protective cunning elaborates these modes of sham-work. 

§ 3. The social condemnation of a sporting-life is two-fold. In 
the first place, it diverts into lower forms of activity the zests 
and interests intended to promote a life of work and art. The 
sporting-life and standards choke the finer arts. The sportsman 
and the gamester are baser artists choosing the lower instead of 
the higher modes of self-realisation in manual and intellectual 



I50 WORK AND WEALTH 

skill. This maintenance of barbarian standards of values by the 
classes possessing social prestige is a great obstacle to the develop- 
ment of science, art, and literature. In the second place, sport 
spoils the spontaneity and liberty of play, which is a necessity 
of every healthy life. It spoils it for the sportsman by reason of 
its artificiality and its excess. For the sporting-life does not sat- 
isfy those who practise it. It carries the Nemesis of boredom. 
The sense of triviality and of futility gradually eats through, 
and the make-beheve realism, when confronted with the serious 
values of life, shows its emptiness. A heavier social damage is 
the economic cost which the expensive futility imposes. For 
sport involves the largest diversion of unearned income into un- 
productive expenditure. Not only does it dedicate to extrava- 
gant waste a larger share of the land, the labour, and the enter- 
prise of men than any other human error, unless it be war itself, 
but it steals the play-time of the many to make the over-leisure 
of the few. If the parasitic power which sustains the sporting- 
life were taken away, the world would not be duller or more 
serious. On the contrary, play would be more abundant, freer, 
more varied, and less artificial in its modes. 

The identification of a sportsman with a gentleman has carried 
great weight in the unconscious settling of social values, and in 
England has been subtly serviceable as a sentimental safeguard 
against the attacks upon the economic supports not only of land- 
lordism but of other wealth which has covered itself with the 
trappings of sport. 

The relative prestige of other occupations is determined to a 
considerable extent by their association with the sporting-life 
or with the original activities which sport reproduces. Not only 
the idle landowner, but the yeoman, and in a less degree the ten- 
ant farmer, enjoy a social consideration beyond the measure of 
their pecuniary standing, by virtue of the opportunities for hunt- 
ing and other sport which they enjoy. Part of the reputation of 
the military and the naval services is explained by the survival 
of the barbarian feeling that a life of hazard and rapine contains 
finer opportunities for physical prowess than a life of productive 
activity. Though a good deal of this prestige belongs to the glory 
of 'command' and extends even to a great employer of labour, 



SPORT, CULTURE AND CHARITY 151 

the glamour of the soldier's, hunter's, sportsman's life hangs in 
a less degree about all whose occupations, however servile, keep 
them in close contact with these barbarian activities. A pub- 
lican, a professional cricketer, a stud-groom, a gamekeeper, enjoy 
among their companions a dignity derived from their association 
with the sporting-life. 

§ 4. If physical recreations thus carry prestige, so in a less de- 
gree and in certain grades of society do intellectual recreations. 
Once a sportsman alone had a claim to be regarded as a gentle- 
man. Only in comparatively modern times did the association 
of ' a scholar and a gentleman ' seem plausible. Even now prow- 
ess of the mind can seldom compete in glory with prowess of the 
body. The valuation of achievements current in our pubhc- 
schools persists, though with some abatement, among all sorts 
and conditions of men. But as mental skill becomes more and 
more the means of attaining that financial power which is the 
modern instrument of personal glory, it rises in social esteem. 
As manners, address, mental ability and knowledge more and 
more determine personal success, intellectual studies become in- 
creasingly reputable. 

It might appear at the first sight that the highest reputation 
would attach to those abilities and studies which had the high- 
est immediate utility for money-making. But here the barba- 
rian standard retains a deflecting influence. To possess money 
which you have not made still continues to be far more honor- 
ific than to make money. For money-making, unless it be by 
loot or gambhng, involves addiction to a business life instead of 
the life of a leisured gentleman. So it comes to pass that studies 
are valued more highly as decorative accomplishments than as 
utilities. A man who can have afforded to expend long years 
in acquiring skill or knowledge which has no practical use, 
thereby announces most dramatically his possession, or his 
father's possession, of an income enabling him to lead the Hfe 
of an independent gentleman. The scale of culture-values is 
largely directed by this consideration. Thus not only the choice 
of subjects but the mode of treatment in the education of the 
children of the well-to-do is, generally speaking, in inverse ratio 
to their presumed utility. The place of honour accorded to 



152 WORK AND WEALTH 

dead languages is, of course, the most patent example. Great 
as the merits of Greek and Latin may be for purposes of intel- 
lectual and emotional training, their predominance is not mainly 
determined by their merits, but by the traditional repute which 
has made them the chosen instruments for a parade of 'useless' 
culture. Though some attempt is made in recent times to ex- 
tract from the teaching of the ' classics ' the finer qualities of the 
'humanities' which they contain, this has involved a revolt 
against the pure ' scholarship ' which sought to exclude even such 
refined utilities and to confine the study of the classics to a grace- 
ful, skilful handhng of linguistic forms and a purely superficial 
treatment of the thought and knowledge contained in the chosen 
Hterature. It is significant that even to-day 'culture' primarily 
continues to imply knowledge of languages and hterature as ac- 
compHshments, and that, though mathematics and natural 
sciences enter more largely into the academic curriculum, they 
continue to rank lower as studies in the education of our wealthy 
classes. 

Most convincing in its testimony to the formation of intellec- 
tual values is the treatment of history and modern English 
literature. Although for all purposes of culture and utihty, it 
might have been supposed that the study of the thought, art, 
and events of our own nation and our own times, would be of 
prime importance, virtually no place is given to these subjects. 
History and literature, so far as they figure at all, are treated not 
in relation to the life of to-day, but as dead matter. Other sub- 
jects of strictly vital utihty, such as physiology and hygiene, 
psychology and sociology, find no place whatever in the general 
education of our schools and universities, occupying a timid posi- 
tion as ' special ' subjects in certain professional courses. 

Pedagogues sometimes pretend that this exclusion of 'utiHty' 
tests for the subjects and the treatment in our system of educa- 
tion rests upon sound educational principles, in that, ignoring 
the short-range utilities which a commercial or other 'practical' 
training desiderates, they contribute to a deeper and a purer 
training of the intellectual faculties. But having regard to the 
part played by tradition and ecclesiastical authority in the es- 
tabhshment of present-day educational systems, it cannot be 



SPORT, CULTURE AND CHARITY 153 

admitted that they have made a serious case for the appraise- 
ment of studies according to their human values. Probably our 
higher education, properly tested, would be found to contain a 
far larger waste of intellectual ' efhciency ' than our factory sys- 
tem of economic efficiency. And this waste is primarily due to 
the acceptance and survival of barbarian standards of culture, 
imperfectly adjusted to the modern conditions of life, and chiefly 
sustained by the desire to employ the mind for decorative and 
recreative, rather than for productive or creative purposes. Art, 
literature and science suffer immeasurable losses from this mis- 
government of intellectual life. The net result is that the vast 
majority of the sons and daughters even of our well-to-do classes 
grow up with an exceedingly faulty equipment of useful knowl- 
edge, no trained ability to use their intellects or judgments freely 
and effectively, and with no strong desire to attempt to do so. 
They thus remain or become the dupes of shallow traditions, or 
equally shallow novelties, under the guise of scientific, philo- 
sophic, economic or political principles which they have neither 
the energy of mind nor the desire to test, but which they permit 
to direct their lives and conduct in matters of supreme importance 
to themselves and others. 

As education is coming to take a larger place as an organised 
occupation, and more time, money and energy are claimed for 
it, the necessity of a revaluation of intellectual values on a sane 
basis of humanism becomes more exigent than ever. For there 
is a danger of a new bastard culture springing up, the product 
of a blending of the barbarian culture, descending by imitation 
of the upper classes, with a too narrowly utilitarian standard im- 
provised to convert working-class children into cheap clerks 
and shopmen. Our high-schools and local universities are al- 
ready victims to this mesalliance between 'culture' and 'busi- 
ness', and the treatment of not a few studies, history and eco- 
nomics in particular, is subject to novel risks. 

§ 5. Dilettantism is the intellectual equivalent of sport. What 
is the moral equivalent? The sporting-life has an ethics of its 
own, the essence of which lies in eschewing obligations with 
legal or other compulsory external sanctions, in favour of a vol- 
untary code embodying the mutual feelings of members of a 



154 WORK AND WEALTH 

superior caste. In an aristocracy of true sportsmen honesty 
and sexual 'morality' are despised as bourgeois virtues, while 
justice is too compulsory and too equalitarian for acceptance. 
Honour takes the place of honesty, good form of morals, fair- 
play and charity of justice. It is the code of the barbarian super- 
man or chieftain, qualified, softened and compHcated to suit the 
conditions of the modern play-life. Courage and endurance, 
fidelity, generosity and mercy are his virtues: temperance, mod- 
esty, humihty, gratitude, have no proper place in such a code, 
which is indeed based upon a free exercise of the physical func- 
tions for personal pleasure and glory. 

The hazard belonging to a sporting Ufe makes for superstition. 
Nobody is more crudely superstitious than the gambler, and 
everybody to whom Hfe is primarily a game conceives of it as 
proceeding by rules which may be evaded or tampered with. 
This aspect of the sporting character gave the priestly caste its 
chief opportunity to get power. So pietism was grafted on the 
sportsman and the fighting-man, and religion kept a hold on 
the ruhng and possessing classes, adapting its moral teaching 
to his case. The wide divergence of British Christianity from 
the teaching of the gospels finds its chief explanation in this ne- 
cessity of adaptation. Its doctrines and its discipHne had to be 
moulded so as to fit the character and conduct of powerful men, 
who not only would repudiate its inner spiritual teaching, but 
whose lust, pride, cruelty and treachery, the natural outcome of 
their animal life, were constantly leading them to violate the 
very code of honour they professed. As industry and property, 
peace and order, became more settled and wide-spread, there 
came up from below a powerful commercial class, whose eco- 
nomic and social requirements evolved a morality in which the so- 
called puritan virtues of industry, thrift, honesty, temperance, 
sexual purity, prevailed, and a Christianity designed primarily 
to evoke and to sustain them. Just as the intellectual culture 
of the aristocracy came to clash with the utilitarian education 
of the bourgeois and to produce the confusing compromise which 
at present prevails, so with the differing ethics of the same two 
classes. The incursion of the wealthy tradesman into 'high life' 
and of the landed gentry into the 'city' has visibly broken 



SPORT, CULTURE AND CHARITY 155 

down the older standards both of morals and of manners. The 
prestige of the sporting virtues has played havoc with the sim- 
plicity and austerity of the puritan morals and creeds, though it 
may fairly be maintained that the saner utiHties of the latter 
have tempered to a perceptible degree the morals and manners 
of the sportsman. Luxuries and frivolities of a more varied order 
have largely displaced the older sporting-life, introducing into 
it some elements of more intellectual skill and interest, though 
it remains primarily devoted to the pursuit of pleasurable sensu- 
ous futilities. 

But, though the modes of the leisure life are shifting, the defi- 
nitely parasitic attitude and career which it embodies remain un- 
changed. The sense of justice and of humanity among its mem- 
bers is as defective as ever. This truth is sometimes concealed 
by the change in social areas that is taking place. Class honour 
and comradeship have a somewhat wider scope as the range of 
effective intercourse expands, and classes which formerly were 
wide apart come partially to fuse with one another, or are brought 
within the range of sympathy, as regards their more sympathetic 
members. So intercourse upon a fairly equal basis can take 
place in such a country as England between most persons who 
have reached a certain level of refinement of living. This cer- 
tainly implies some transfusion of moral standards, the union of 
common sentiments regarding industry and property with the 
downward spread of a modified conception of a sporting life. 
Indeed, imitation has gone a certain way towards infecting all 
the stabler grades of the working-classes with this blend of bar- 
barian and puritan valuations. While the larger pecuniary 
means and leisure which they possess has introduced into their 
standard of life sporting habits largely imitative of the fully 
leisured aristocracy, it has implanted habits of ' respectabihty ' 
as the contribution of the bourgeois type immediately above 
them in the social scale. 

§ 6. But when we dip down below the bourgeois and the regu- 
lar working-classes which he has drilled in industry, we find a 
lower leisure class whose valuations and ways of living form a 
most instructive parody of the upper leisure class. Both in 
country and town life these types appear. They include 'gyp- 



156 WORK AND WEALTH 

sies', tramps, poachers and other vagabonds, who have never 
been enHsted in the army of industry, or have deserted in favour 
of a 'free' Kfe of hazard, beggary and plunder. In towns natural 
proclivities or misfortune account for considerable groups of 
casual workers, professional or amateur thieves and prostitutes, 
street-sellers, corner-men, kept husbands, and other parasites 
who are a burden on the working-classes. Alike in country and 
in town, these men practise, so far as circumstances allow, the 
same habits and exhibit the same character as the leisure class 
at the top. The fighting, sporting, roving, generous, reckless, 
wasteful traits are all discernible, the same unaffected contempt 
for the worker, the same class camaraderie, often with a special 
code of honour, the same sex license and joviahty of manners. 
Even their intelligence and humour, their very modes of speech, 
are the half-imitative, half-original rephca of high life as it shows 
in the race-course, in the club smoke-room, or the flash music- 
hall. Often the parasites and hangers-on to upper-class sports 
and recreations, these form a large and growing class of our pop- 
ulation, and their withdrawal from all industry that can be 
termed productive, coupled with the debased mode of consump- 
tion which they practise, count heavily in the aggregate of social 
waste. 

§ 7. As the opportunities of leisure and of some surplus income 
beyond the current accepted standard of class comfort become 
more general, this sympathetic imitation of recreations, educa- 
tion and morals, undoubtedly makes for a national standardisa- 
tion of Hfe, though the enormous discrepancies in economic re- 
sources greatly limit the efficacy of such a tendency to unity. 
But the apparent gain in humanity thus suggested is largely 
counterworked by the stronger sense of national and especially 
of racial cleavage which has come with modern world intercourse. 
If class barriers of conduct, education and feeling are somewhat 
weakening in the foremost European nations, a clearer and in- 
tenser realisation of national and racial barriers takes their 
place. Every modification of class exclusiveness, and of eco- 
nomic plunder, upon the smaller scale, is compensated by this 
wider racial exclusiveness, with its accompanying parasitism. 
The civilised Western world is coming more consciously to mould 



SPORT, CULTURE AND CHARITY 157 

its practical policy, political and economic, and its sentiments 
and theories, upon a white exploitation of the lower and the back- 
ward peoples. Imperialism is displacing, or at present is crossing, 
class supremacy, and is evolving an intellectualism and a morals 
accommodated to the needs of this new social cleavage. It is 
moving towards a not distant epoch in which Western white 
nations may, as regards their means of livelihood, be mainly de- 
pendent upon the labour of regimented lower peoples in various 
distant portions of the globe, all or most members of the domi- 
nant peoples enjoying a life of comparative pleasure and leisure 
and a collective sense of personal superiority as the rulers of 
the earth. 

That standards of recreation, education and morals, thus 
formed and transformed, are likely to contain enormous * wastes ' 
in their direct and indirect bearing upon economic Ufe, is ob- 
vious. How far this waste is to be imputed to imitation of the 
prestige-possessing habits of 'the leisured class', how far to 
'original sin' or the errors or excesses natural to all sorts and 
conditions of men, it is not possible to ascertain. But it will be 
evident that in these higher satisfactions, to which an increasing 
'surplus' of wealth, leisure and energy can be devoted, will be 
found the largest wastes. For the conventional expenditure em- 
bedded in these strata of the various class standards will be 
largely directed by motives which are very loosely related to 
any real standard of organic welfare. One need not exaggerate 
this expenditure of time or money, or deem it wholly unproduc- 
tive. It may even be conceded that few of the pursuits of pleas- 
ure are wholly destitute of benefit, nor are prestige and the imi- 
tation it engenders wholly valueless. But such practices contain 
much that is obsolete, incongruous or indigestible, much that is 
actively injurious, both to the individual and to society. Re- 
garded from the standpoint of pecuniary expenditure, the mis- 
direction of the surplus income into empty or depraved modes 
of recreation, culture, religion and charity is the largest of all 
economic wastes. Could it be set forth in veracious accounts, 
its enormity would impress all reflective minds. How small the 
total yield of human welfare or even of current pleasurable sat- 
isfaction from the idle travel, racing, hunting, motoring, golfing, 



158 WORK AND WEALTH 

yachting, betting and gambling, in comparison with the human 
gain from the work and arts of which they are the futile substi- 
tutes! Consider the damage to agriculture, the sheer loss of 
human energy, the selfishness, sensuaUty and brutality inci- 
dental to many sports, the empty-mindedness, obtuseness of 
intelligence and insensate pride, the shutting of the senses and 
the emotions to most of the finer and nobler scenes in the spec- 
tacle of nature and the drama of humanity, that are the natural 
and necessary consequences of 'a sporting Hfe.' Or could one 
accurately analyse the costs of dilettantism, sham culture, with 
its monstrous perversions of productive energy in the fields of 
pedagogy, art, science, and literature, in a descending scale of 
frivolousness or depravity, as they seize by imitation the awaken- 
ing mind of ever larger strata of our populations! But even 
worse than sham intellectualism is the sham morality which tricks 
itself out in pietistic formulas and charitable practices, so as to 
evade obedience to the plain laws of human brotherhood and 
social justice in this world. 

The widest and deepest implications of this parasitic life of 
luxury and leisure, the substitution of recreation for art and 
exercise, of dilettantism for the life of thought, of pietism, and 
charity for human fellowship, lie beyond the scope of our formal 
enquiry. We are concerned with them primarily as affecting 
economic production and consumption. Sport, dilettantism and 
charity are for us characteristic products of mal-distribution seiz- 
ing that surplus-income which is the economic nutriment of social 
progress, and applying it to evolve a complicated life of futile 
frivolities for a small leisured class who damage by their conta- 
gious example and incitement the standards of the working 
members of the society in which they exercise dominion. 



CHAPTER XII 

THE HUMAN LAW OF DISTRIBUTION 

§ I. In seeking at once to establish and apply to industry a 
standard of human value, we have taken for our concrete subject- 
matter the aggregate of marketable goods and services that 
constitute the real income of the nation. This real wealth, 
distributed in income among the various members of the com- 
munity, we subjected to a double analysis, tracing it backwards 
through the processes of its production, forward into its consump- 
tion. Some of the activities of its production we recognised as 
being in themselves interesting, pleasant, educative or other- 
wise organically useful: others we found to be uninteresting, 
painful, depressing or otherwise organically costly. A similar 
divergence of human value appeared in the consumption of those 
forms of wealth. Some sorts and quantities of consumption were 
found conducive to the maintenance and furtherance of healthy 
life, both pleasant and profitable. Other sorts and qualities of 
consumption were found wasteful or injurious to the life of the 
consumers and of the community. 

The general result of this double analysis may be summarised 
in the following tabular form. 





WEALTH 


PRODUCTION 




Art & Exercise. 


Human 


Labour. 


Utility 


Toil. 


Human 


Mal-production. J 


Cost 



CONSUMPTION 

I Needs. 
Abundance. 



Satiety. 
Mal-consumption. 



In the ordinary economic account 'costs' appear entirely on 
the Production side of the account, 'utihty' entirely on the Con- 

159 



i6o WORK AND WEALTH 

sumption side. Production is regarded not as good or desirable 
in itself, but only as a means towards an end, Consumption. 
On the other hand, all parts of Consumption are regarded as in 
themselves desirable and good, and are assessed as Utihties ac- 
cording to the worth which current desires, expressed in pur- 
chasing power, set upon them. 

Our human valuation refuses to regard work as a mere means 
to consumption. It finds hfe and welfare in the healthy func- 
tioning of productive activities, as well as in the processes of 
repair and growth which form sound consumption. 

If all production could be reduced to Art and Exercise, the 
creative and the re-creative functions, all consumption to the 
satisfaction of physical and spiritual needs, we should appear to 
have reached an ideal economy, in which there would be no hu- 
man costs and a maximum amount of human utility. The con- 
ditions of a complete individual life would seem to be attained. 
But we are not concerned with a society in which completeness 
of the individual Ufe is the sole end, but with a society in which 
the desires, purposes and welfare of the individuals are com- 
prised in the achievement of a common life. For this reason I 
have included under the head of Utility on the Productive side 
of our account, not only the Art and Exercise which are directly 
conducive to individual well-being, but a quantum of Labour 
which represents the economic measure of the inter-dependency, 
or solidarity, of the so-called individuals. Such labour is the 
so-called 'sacrifice' required of 'individuals' in the interest of 
the society to which they belong. To the individualist it ap- 
pears a distortion of the free full development of his nature, an 
interference with his perfect Hfe. But it is, of course, neither 
sacrifice nor distortion. For the so-called individual is nowise, 
except in physical structure,^ completely divided from his fel- 
lows. He is a social being and this social nature demands recog- 
nition and expression in economic processes. It requires him to 
engage in some special work which has for its direct end the wel" 

^ Even there he is not separated in physical functions. The sexual, philoprogeni- 
tive, and the gregarious instincts, which are rooted in physical structure, negate 
physical individualism. So does the structure of his brain, which in solitude decays 
or becomes diseased. 



THE HUMAN LAW OF DISTRIBUTION i6i 

fare of society, in addition to the work of using his own powers 
for his own personal ends. How far this routine labour for so- 
ciety can be taken into his conception of his human nature, and 
so become a source of personal satisfaction, is a question we shall 
discuss later on. At present it will sufhce to recognise that each 
man's fair contribution to the routine labour of the world, though 
irksome to him, is not injurious but serviceable to his 'human' 
nature. Thus interpreted, it stands on the utihty, not on the 
cost, side of the account. It must be distinguished from its ex- 
cess, which we here term 'toil', and from work, which whether 
from an abuse of the creative faculty or of social control, is bad 
and degrading in its nature and is here termed mal-production. 

A similar distinction between the narrowly personal and the 
broader social interpretation of welfare is appKcable on the con- 
sumption side. It is clearly not enough that the income which 
is to furnish consumption should suffice only to make provision 
for the satisfaction of the material and spiritual needs of the in- 
dividual — or even of his family. The expenditure of every man 
should contain a margin — which I here call 'abundance' — from 
which he may contribute voluntarily to the good of others. There- 
will be public needs or emergencies, which are not properly 
covered by State services but remain a call upon the pubHc 
spirit of persons of discernment and humanity. There are also 
the calls of hospitality and comradeship, and the wider claim of 
charity, the willing help to those in need, a charity that is spon- 
taneous, not organised, that degrades neither him who gives nor 
him who receives, because it is the natural expression of a spirit 
of human brotherhood. For the sting alike of condescension 
and of degradation would be removed from charity, when both 
parties feel that such acts of giving are an agreeable expression 
of a spirit of fellowship. From the consumption which is thus 
applied to the satisfaction of sound personal needs, or which 
overflows in 'abundance' to meet the needs of others, we dis- 
tinguish sharply that excessive quantity of consumption, which 
in our Table ranks as 'Satiety', and those base modes of con- 
sumption which in their poisonous reactions on personal and 
social welfare strictly correspond to the base forms of production. 

S 2. Such are the general lines of demarcation between the 



i62 WORK AND WEALTH 

strictly business and the human valuation of the productive and 
consumptive processes. We now perceive how close is the re- 
semblance of the laws of human valuation as appHed to the two 
sides of the equation of Wealth. This similarity is, of course, 
no chance coincidence: it inheres in the organic nature of so- 
ciety and of individual life. But, in order to proceed with our 
main purpose, the expression of the economic income in terms 
of human income, we must bring the two sides of the enquiry 
into closer union. We can thus get a fair survey of the current 
life of industry from the standpoint of wealth and waste, health 
and disease. So far as our national income, the £2,000,000,000 
of goods and services, are produced by activities, which in their 
nature and distribution can be classed as Art, Exercise and Social 
Labour, and are consumed in ways conducive to the satisfac- 
tion of individual and social Needs, our industrial society is 
sound. 

Probably the greater part of our income is thus made and 
spent. The necessity of attending more closely to the defects 
than to the successes of the present system must not lead us to 
disparage the latter. 

If industry were in fact the irrational, unjust and utterly in- 
human anarchy it is sometimes represented to be, it would not 
hold together for twenty-four hours. Not merely is the individ- 
ual business in its normal state a finely adjusted, accurately- 
working complex of human skill, industry and cooperative good- 
will, but the larger and less centralised structures, which we call 
trades and markets, show a wonderful intricacy of order in their 
form and working. To feed the thousands of mills and workshops 
of England with a fairly regular supply of countless materials 
drawn from the wide world, to feed the millions of mouths of 
our people with their regular supply of daily food, are notable 
achievements of industrial order. In concentrating, as we must, 
our chief thought upon the disorder of the system, the places 
where it fails, and the damage of such failure, we gain nothing 
by exaggerating the industrial maladies and their social injuries. 

The proportions of order and disorder, health and disease, 
human cost and human utility, in the working of our industrial 
system are best ascertained by turning once more to our con- 



THE HUMAN LAW OF DISTRIBUTION 163 

Crete mass of wealth, our income, and enquiring into the quantita- 
tive method of its distribution. 

In examining the human costs involved in a given output of 
labour-power (and of other productive energy) we recognised 
that very much depended upon the conditions of that output, and 
particularly upon the length and intensity of the working-day 
and working-week. 

Similarly, in examining the human utility got from the con- 
sumption of a given quantity of goods, we recognised that it will 
depend upon the sort and the number of persons who receive it 
for consumption. 

So from both sides of the question we approach the central 
issue of the distribution of Wealth. 

If the £2,000,000,000 of goods were found to be so distributed 
in the modes of their production as to involve no burden of toil 
and no injury upon the producers, while they were so distributed 
in income as to involve no waste or damage in consumption, the 
human utility it represented would reach a maximum and cost 
would be zero. 

If, on the other hand, the same goods were largely produced 
by ill-nourished labourers, working long hours under bad hy- 
gienic conditions, and using capital largely furnished by the pain- 
ful and injurious saving of the poor, while the distribution of 
the goods was such as to assign the bulk of them to a small af- 
fluent class, the masses living on a bare subsistence level, the 
human utility of such a system would be very small, its human 
cost very great. Judged indeed from any right standard of 
civilisation, an industrial society of the latter sort might repre- 
sent a minus quantity of human welfare. 

There might even be two nations of equal population and 
economic income, equally prosperous from the standpoint of 
statistics of commerce, which nevertheless, by reason of the 
different apportionment of work and income, stood poles asunder 
in every true count of human prosperity. 

§ 3. Now the Human Law of Distribution, in its application to 
industry, aims, as we have seen, to distribute Wealth, in relation 
to its production on the one hand and its consumption on the 
other, so as to secure the minimum of Human Costs and the max- 



1 64 WORK AND WEALTH 

imum of Human Utility. No bare rule of absolute equality, 
based upon the doctrine of equal rights, equal powers or equal 
needs, will conduce to this result. The notion that the claims 
of justice or humanity would be met by requiring from all per- 
sons an equal contribution to the general output of productive 
energy is manifestly foolish and impracticable. To require the 
same output of energy from a strong as from a weak man, from 
an old as from a young, from a woman as from a man, to ignore 
those actual differences of age, sex, health, strength and skill, 
would be rejected at once as a preposterous application of human 
equality. If such an equal output were required, it could only 
be obtained by an average task which would unduly tax the 
powers of the weak, and would waste much of the powers of 
the strong. A similar human economy holds of the provision 
of capital through saving. To impose saving upon working folk 
whose income barely maintains the family efficiency, when other 
folk possess surplus-incomes out of which the socially necessary 
capital can be provided, is a manifestly wasteful policy. Those 
who have no true power to save should not be called upon to 
undergo this 'cost': all saving should come proportionately out 
of higher incomes where it involves no human sacrifice. AUke, 
as regards labour and capital, the true social economy is ex- 
pressed in the principle that each should contribute in accord- 
ance with his ability. 

It should be similarly evident that exact equality of incomes 
in money or in goods for all persons is not less wasteful, or less 
socially injurious. I cannot profess to understand by what rea- 
soning some so-called Socialists defend an ideal order in which 
every member of society, man, woman and child, should have 
an absolutely equal share of the general income. The needs of 
people, their capacity to get utility out of incomes by consuming 
it, are no more equal than their powers of production. Neither 
in respect of food, or clothing, or the general material standard 
of comfort, can any such equality of needs be alleged. To say 
that a big strong man, giving out a correspondingly large output 
of energy, needs exactly the same supply of food as a small 
weakly man, whose output is a third as great, would be as ridicu- 
lous as to pretend that a fifty-horse power engine needed no 



THE HUMAN LAW OF DISTRIBUTION 165 

more fuel than a ten-horse power one. Nor will the differences 
in one set of needs be closely compensated in another. Mankind 
is not equal in the sense that all persons have the same number 
of faculties developed, or capable of development, to the same 
extent, and demanding the same aggregate amount of nutriment. 
To maintain certain orders of productive efi&ciency will demand 
a much larger consumption than to maintain others. Because 
differences of income and expenditure exist at present which are 
manifestly unjust and injurious, that is no reason for insisting 
that all differences are unwarrantable. Equality of opportu- 
nity does not imply equality but some inequality of incomes. 
For opportunity does not consist in the mere presence of some- 
thing which a man can use, irrespective of his own desires and 
capacities. A banquet does not present the same amount of 
opportunity to a full man as to a hungry man, to an invalid as 
to a robust digestion. £1,000, spent in library equipment for 
university students, represents far more effective opportunity 
than the same sum spent on library equipment in a community 
where few can read or care to read any book worth reading. 
Equality of opportunity involves the distribution of income ac- 
cording to capacity to use it, and to assume an absolute equality 
of such capacity is absurd. 

It may no doubt be urged that it is difficult to measure in- 
dividual needs and capacities so as to apply the true organic 
mode of distribution. This is true and any practical rules for 
adjusting income, or for distribution of the product, according 
to needs, will be likely to involve some waste. But that is no 
reason for adopting a principle of distribution which must in- 
volve great waste. However difficult it may be to discover and 
estimate differences of needs in individuals or classes of men, to 
ignore all differences insures a maximum of waste. For, assum- 
ing, as it does, a single average or standard man, to which t}pe 
no actual man conforms, it involves a necessary waste in each 
particular case. Everyone, in a word, would under this mechan- 
ical interpretation of equality possess either a larger or a smaller 
income than he could use. Such a doctrine, though sometimes 
preached by persons who call themselves socialists, is really a 
survival of the eighteenth-century doctrine of individual rights, 



i66 WORK AND WEALTH 

grafted on to a theory of the uniformity of human nature that 
is contradicted by the entire trend of science. 

This levelhng doctrine only serves to buttress the existing 
forms of inequahty, by presenting in the guise of reform a spu- 
rious equahty, the folly and the waste of which are obvious even 
to the least reflecting of mankind. 

§ 4. Distribution of income according to needs, or ability to 
use it, does not, indeed, depend for its practical validity upon 
the application of exact and direct measurements of needs. The 
limits of any sort of direct measurement even of material needs 
appear in any discussion of the science of dietetics. But inexact 
though such science is, it can furnish certain valid reasons for 
different standards of food in different occupations, and for other 
discriminations relating to race, age, sex and vigour. What 
holds of food will also hold of housing, leisure, modes of recrea- 
tion and intellectual consumption. Nor must it be forgotten 
that, for expenditure, the family is the true unit. The size and 
age of the family is certainly a relevant factor in estimating needs, 
and in any distribution on a needs basis must be taken into ac- 
count. 

PubHc bodies, and less commonly private forms, in fixing sal- 
aries and wages, are consciously guided by such considerations. 
The idea is to ascertain the sum which will maintain a worker, 
with or without a family, in accordance with economic efficiency, 
and having regard to the accepted conventions of the class from 
which he will be drawn. Having determined this 'proper' salary 
or wage, they seek to get the best man for the work. It is true 
that the conventional factor looms so big in this process as often 
to obscure the natural economy. When it is determined by a 
municipality that its Town Clerk ought to have £1500 a year 
and its dustman 22s. a week, it appears a palpable straining of 
language to suggest that differences of 'needs' correspond to 
this discrepancy of pay. For, though it is true that in the ex- 
isting state of the market for legal abihty and experience the 
town may not be able to get a really good town clerk for less, 
that state of the legal market is itself the result of artificial re- 
strictions in opportunity of education and of competition, which 
have no natural basis and which a society versed in sound social 



THE HUMAN LAW OF DISTRIBUTION 167 

economy will alter. But the fact that the existing interpretation 
of needs is frequently artificial and exaggerated must not lead 
us to ignore the element of truth embodied in it. The wages of 
policemen, the real v/ages of soldiers and sailors, are determined 
with conscious relation to the needs of able-bodied men engaged 
in hard physical work, and with some regard to the existence of 
a wife and family. But I need not labour the point of the dif- 
ference between the salary and the 'commodity' view of labour. 
The acceptance among all thoughtful employers of ' the economy 
of high wages ' applied within reasonable limits is itself the plain- 
est testimony to the actuality of the 'needs' basis of income. 
That unless you pay a man enough to satisfy his needs, you can- 
not get from him his full power of work, is a proposition which 
would meet with universal acceptance. 

But it will commonly be added that the safest way of measur- 
ing needs is by means of output. This output, measured by 
work-time, or by piece, or by a combination of the two, still re- 
mains the general basis of payment. How far is this conform- 
able to our theory of human distribution, according to needs? 
That there is some conformity will, I think, be easily perceived. 
If one docker unloads twice as much grain or timber as another 
docker in the same time, or if one hewer working under the same 
conditions 'gets' twice as much coal as another, there is a reason- 
able presumption that the larger actual quantity of labour has 
taken a good deal more 'out of him'. 

Putting the comparison on its barest physical basis, there has 
been a larger expenditure of tissue and of energy, which must 
be replaced by a larger consumption of food. A strong man 
doing much work may not be exerting himself more than a weak 
man doing little work. But all the same there is some propor- 
tion between the respective values of their output of physical 
energy and their intake of food. This, of course, is a purely 
physiological application of our law of human distribution. It 
applies both to sorts of work and to individual cases in the same 
sort of work, and constitutes an 'organic' basis for difference of 
'class' wages and individual wages. We urge that it is appli- 
cable to other factors of consumption than food, and throughout 
the whole area of production and consumption. But applied as 



i68 WORK AND WEALTH 

a practical principle for determining distinctions of class or 
grade payment, and still more for individual payment within a 
class, it has a very limited validity. Rigorously applied it is 
the pure 'commodity' view of labour, the antithesis of the 'sal- 
ary' view which best expresses the 'needs' economy. But, 
though output cannot be taken as an accurate measure of ' needs ' 
for the purpose of remuneration, it clearly ought to be taken 
into account. The practical reformer will indeed rightly insist 
that it must be taken into account. For he will point out that 
output is a question not merely of physiological but still more of 
moral stimulus. A strong man will not put out more productive 
energy than his weaker fellow unless he knows he is to get more 
pay; a skilful man cannot be relied upon to use his full skill un- 
less he personally gains by doing so. If the sense of social ser- 
vice were stronger than it is, a bonus for extra strength or skill 
might be unnecessary. But as human nature actually stands, 
this stimulus to do a ' best ' that is better than the average, must 
be regarded as a moral 'need' to be counted for purposes of re- 
muneration along with the physiological needs. Too much need 
not be made of this distinctively selfish factor. In many sorts 
of work, indeed, it may not be large enough to claim recognition 
in remuneration. But where it is important, the application of 
our needs economy of distribution must provide for it. This ad- 
mission does not in the least invalidate our organic law. For the 
moral nature of a man is as 'natural' as his physical nature. 
Both are amenable to education, and with education will come 
changes which will have their just reactions upon the policy of 
remuneration. 

§ 5. The organic law of distribution in regarding needs will, 
therefore, take as full an account as it can both of the unity and 
the diversity of human nature. The recognition of 'common' 
humanity will carry an adequate provision of food, shelter, 
health, education and other prime necessaries of life, so as to 
yield equal satisfaction of such requirements to all members of 
the community. This minimum standard of life will be substan- 
tially the same for all adult persons, and for all families of equal 
size and age. Upon this standard of human uniformity will be 
erected certain differences of distribution, adjusted to the spe- 



THE HUMAN LAW OF DISTRIBUTION 169 

cific needs of any class or group whose work or physical conditions 
marks it out as different from others. The present inequalities 
of income, so largely based upon conventional or traditional 
claims, would find little or no support under this application of 
the organic law. Indeed, it seems unlikely that any specific re- 
quirements of industrial or professional life would bulk so largely 
in interpreting human needs as to warrant any wide discrimina- 
tion of incomes. There seems no reason to maintain that a 
lawyer's or a doctor's family would require, or could advanta- 
geously spend, a larger income than a bricklayer's, in a society 
where equality of educational and other opportunities obtained. 
But, if there were any sorts of work which, by reason of the spe- 
cial calls they made upon human faculties, or of the special condi- 
tions they imposed, required an expenditure out of the common, 
the organic law of distribution according to needs would make 
provision for the same as an addition to the standard minimum. 
So likewise the hours of labour would be varied from a standard 
working-day to meet the case of work unusually intense or wear- 
ing in its incidence. To what extent society would find it nec- 
essary to recognise individual differences of efficiency within each 
grade as a ground for particular remuneration — and how far 
such claims would represent, not payment according to true 
needs but power to extort a personal rent — is a question which 
can only be answered by experience. It may, however, be re- 
garded as certain that the high individual rents which prevail 
at present in skilled manual and mental work, could not be 
maintained. For these high rates depend upon conditions of 
supply and of demand which would not then exist. The enor- 
mous fees which specialists of repute in the law or medicine can 
obtain depend, partly, upon the inequality of educational and 
social opportunities that limits the supply of able men in these 
professions; partly, upon other inequalities of income that en- 
able certain persons to afford to pay such fees. Equality of 
opportunity and even an approximate equalisation of income 
would destroy both these sources of high rents of ability. What 
apphes in the professions would apply in every trade. Individ- 
ual 'rents' of abihty might survive, but they must be brought 
within a narrow compass. 



lyo WORK AND WEALTH 

While, then, the selfishness of individual man might give a 
slight twist to the application of the social policy of distribution 
according to needs, it would not impair its substantial vaHdity 
and practicability. 

Thus we see this law of distribution, operative as a purely 
physical economy in the apportionment of energy for mechan- 
ical work, operative as a biological economy through the whole 
range of organic life, is strictly applicable as a principle of social 
economy. Its proper application to social industry would en- 
able that system to function economically, so as to produce the 
maximum of human utiUty with the minimum of human cost. 

§ 6. If we can get an industrial order, in which every perso^ 
is induced to discover and apply to the service of society his 
best abilities of body and mind, while he receives from society 
what is required to sustain and to develop those abiUties, and 
so to live the best and fullest hfe of which he is capable, we have 
evidently reached a formally sound solution of the social problem 
on its economic side. We are now in a position to approach the 
actual processes of economic distribution that prevail to-day, 
so as to consider how far they conform to this sound principle 
of human industry. 

We are not justified at the outset in assuming that any wide 
discrepancy will be admitted. On the contrary, in many quar- 
ters there survives a firm conviction that our actual system of 
industry does work in substantial conformity with the human 
law of distribution. 

The so-called laissez-faire theory of industriahsm based its 
claims to utihty and equity upon an assertion of the virtual 
identity of the economic and the human distribution. If every 
owner of capital or labour or any other factor of production were 
free to apply his factor in any industry and any place he chose, 
he would choose that industry and that place where the highest 
remuneration for its employment was attainable. But since all 
remuneration for the factors of production is derived from the 
product itself, which is distributed among the owners of the sev- 
eral factors, it follows that the highest remuneration must al- 
ways imply the most productive use. Thus, by securing com- 
plete mobihty of capital and labour, we ensure both a maximum 



THE HUMAN LAW OF DISTRIBUTION 171 

production and an equitable distribution. 'Led as by an in- 
visible hand, ' every owner of capital, labour or other productive 
power, disposed of his factor in a manner at once most service- 
able to the production of the general body of wealth and most 
profitable to himself. The appHcation of this theory, of course, 
assumed that everybody knew or could get to know what em- 
ployment he would be likely to find most profitable for his capi- 
tal or labour, and would use that knowledge. It was, moreover, 
held that the actual conditions of industry and commerce did 
and must substantially conform to this h3^othesis of mobiHty. 
Any circumstances, indeed, which contravened it by obstruct- 
ing the mobility and liberty of employment were treated as 
exceptional. Such exceptions were monopolies, the exclusive 
owners of which forbade freedom of entry or of competition to 
outside capital and labour, and secured higher rates of profit 
than prevailed in other businesses. The harmony of perfect in- 
dividualism demanded that all such monopolies, together with 
protective duties and other barriers to complete liberty of com- 
merce and of industry, should be removed. All productive power 
would then flow like water through the various industrial chan- 
nels, maintaining a uniform level of efficient employment, the 
product being distributed in accordance with the several costs 
of its production and being absorbed in the processes of produc- 
tive consumption that were required to maintain the current 
volume of productive power or to enhance it. 

There was a little difliculty in the case of rents of land. Though 
differential rents, measuring the superior productivity of various 
grades of land as compared with the least productive land in use, 
were necessary payments to landowners, they could not rank as 
costs and could not be productively consumed. So Hkewise with 
the scarcity rents, paid even for the least productive lands where 
the supply for certain uses was restricted. Both scarcity and 
differential rents were classed as surplus. But though the mag- 
nitude of this exceptional element might seem to have been a 
fatal flaw in the individualist harmony, a characteristic mode of 
escape was found in the doctrine of parsimony which prevailed. 
Though economic rents could not be productively consumed by 
their recipients, they furnished a natural fund of savings, so pro- 



172 WORK AND WEALTH 

viding the growing volume of new capital which was necessary 
to set labour to productive work. So, by a somewhat liberal 
interpretation, it was contended that 'the simple system of 
natural Hberty', even operating on a basis of private ownership 
of land, drew from each man the best and fullest use of his pro- 
ductive powers, and paid him what was economically necessary 
to maintain and to evoke those powers. Early critics of this 
theory, of course, pointed out that the interpretation of distribu- 
tion 'according to needs' was defective from the standpoint of 
humanity, since the only needs taken into account were effi- 
ciency for productive work, the nourishment and stimulus to 
produce a larger quantity of marketable goods, not the attain- 
ment of the highest standard of human well-being. But to most 
economists of that day such a criticism seemed unmeaning, so 
dominant in their minds was the conception of economic wealth 
as the index and the instrument of human welfare. 

§ 7. It is commonly asserted and assumed that this laissez- 
faire theory is dead, and that the attainment of a harmony of 
social welfare, by the free intelligent play of individual self- 
interest in the direction of economic forces, has been displaced 
by some theory of conscious cooperative or corporate direction 
in which the State takes a leading part. But at this very time, 
when the poHcy of every civilised nation is engaged more and 
more in checking monopolies and industrial privileges upon the 
one hand, and in placing restraints upon the havoc of unfettered 
competition on the other, a distinct and powerful revival of an 
economic theory of production and distribution undistinguish- 
able in its essentials from the crude i8th century laissez-faire 
has set in. Largely influenced by the desire to apply mathemat- 
ics, so as to secure a place for economics as an 'exact' science, 
many English and American economists have committed them- 
selves to a 'marginalist' doctrine, which for its efficiency rests 
upon assumptions of infinite divisibility of the factors of produc- 
tion, and frictionless mobility of their flow into all the channels 
of industry and commerce. These assumptions granted, capital 
and labour flow into all employments until the last drop in each 
is equally productive, the products of the 'marginal' or final 
drops exchanging on a basis of absolute equahty and earning 



THE HUMAN LAW OF DISTRIBUTION 173 

for their owners an equal pa3Ament. Among English economists 
Mr. Wicksteed has set out this doctrine in all its economic ap- 
plications most fully. He shows how by a delicate balance of 
preferences 'at the margins' i. e. in reference to the last portion 
of each supply of or demand for anything that is bought or sold, 
there must be brought about an exact equivalence of utility, of 
worth, and of remuneration, for the marginal increments in all 
emplo3niient. ' So far as the economic forces work without fric- 
tion, they secure to everyone the equivalent of his industrial 
significance at the part of the industrial organism at which he 
is placed.' ^ Elsewhere ^ he asseverates that, as regards the 
workers in any employment, this means that 'they are already 
getting as much as their work is worth,' and that if they are to 
get more, this 'more' can only be got either out of 'communal 
funds,' or by making their work worth more. The same ap- 
plication of the marginalist doctrine is made by Professor Chap- 
man. 'The theory, then, merely declares that each person will 
tend to receive as his wage his value — that is, the value of this 
marginal product — no more and no less. In order to get more 
than he actually does get, he must become more valuable, — work 
harder, for instance — that is, he must add more to the product 
in which he participated.' ^ This is precisely the old 'laissez- 
faire, laissez-aller ' teaching, fortified by the conception that some 
special virtue attaches to the equahsing process which goes on 
*at the margin' of each employment of the factors of production. 
The 'law of distribution' which emerges is that every owner 
of any factor of production 'tends to receive as remuneration' 
exactly what it is 'worth'. Now this 'law' is doubly defective. 
Its first defect arises from the fact that economic science assigns 
no other meaning to the 'worth' or 'value' of anything than what 
it actually gets in the market. To say, therefore, that anybody 
'gets what he is worth', is merely an identical proposition, and 
conveys no knowledge. The second defect is the reliance upon 
a 'tendency' which falsely represents the normal facts and forces. 
It is false in three respects. It assumes in the first place an in- 
finite divisibility of the several factors, necessary to secure the 

1 The Common-sense of Political Economy, p. 698. 

2 P. 345. ^ Work and Wages, Yo\.\,T£i.i^. 



174 WORK AND WEALTH 

accurate balance of 'preferences' at the margins. It next as- 
sumes perfect mobility or freedom of access for all capital and 
labour into all avenues of employment. Finally, it assumes a 
statical condition of industry, so that the adjustment of the fac- 
tors on a basis of equal productivity and equal remuneration at 
the margins may remain undisturbed. All three assumptions 
are unwarranted. Very few sorts of real capital or labour ap- 
proach the ideal of infinite divisibility which marginalism re- 
quires. An individual worker, sometimes a group, is usually the 
minimal 'drop' of labour, and capital is only infinitely divisible 
when it is expressed in terms of money, instead of plants, 
machines or other concrete units. Still less is it the case that 
capital or labour flows or 'tends' to flow with perfect accuracy 
and Uberty of movement into every channel of employment where 
it is required, so as to afford equality of remuneration at the sev- 
eral margins. Lastly, in most industrial societies the constant 
changes taking place, in volume and in methods of industry, 
entail a corresponding diversity in the productivity and the re- 
muneration of the capital and labour employed in the various 
industries ' at the margin.' ^ 

§ 8. This slightly technical disquisition is rendered necessary 
by the wide acceptance which 'marginalism' has won in aca- 
demic circles. Its expositors are able to deduce from it practical 
precepts very acceptable to those politicians and business men 
who wish to show the injustice, the damage and the final futility 
of all attempts of the labouring classes, by the organised pressure 
of trade unionism or by politics, to get higher wages or other ex- 
pensive improvements of the conditions of their employment. 

1 Professor Pigou (Wealth and Welfare, p. 176), though adopting the general posi- 
tion of marginalism, makes a concession, as to its applicability, which is a virtual 
admission of its futility. For by showing that only in 'industries of constant re- 
turns' are 'supply price' and 'marginal supply price' equal, and that in industries 
of 'decreasing' or of 'increasing' returns there exists a tendency to exceed or to 
fall short of 'the marginal net product yielded in industries in general,' he virtually 
endorses the criticism that 'marginalism' assumes a statical condition of industry. 
For only in a statical condition would all industries be found conforming to con- 
stant returns: the operation of increasing or diminishing returns means nothing else 
than that changes in volume or methods of production are raising or lowering pro- 
ductivity and remuneration above or below the equal level which 'marginahsm' 
desiderates. 



THE HUMAN LAW OF DISTRIBUTION 175 

For if 'marginalism' can prove that, as Professor Chapman 
holds, 'in order to get more than he actually does get, he must 
become more valuable — work harder, for example,' it has evi- 
dently re-created the defences against the attacks of the workers 
upon the fortresses of capital which were formerly supplied by 
the wage-fund theory in its most rigorous form. If wages can 
only rise on condition of the workers working harder or better, 
no divergence of interests exists between capital and labour, no 
injustice is done to any class of labour, however low its 'worth' 
may be, and no remedy exists for poverty except through im- 
proved efficiency of the workers. If our political economists 
can bring this gospel of marginalism home to the hearts and 
heads of the working-classes, they will set aside all their foolish 
attempt to get higher wages out of rents and property and will 
set themselves to producing by harder, more skilful and more 
careful labour an enlarged product, the whole or part of which 
may come to them by the inevitable operation of the economic 
law of equal distribution at the margin ! 

It is right to add that an attempt is sometimes made to bring 
marginahsm into a measure of conformity with the notorious 
fact that large discrepancies exist in the rates of remuneration 
for capital or labour or both in various industries, by treating 
these inequalities as brief temporary expedients for promoting 
the ' free flows ' of productive power from less socially productive 
into more socially productive channels, and for stimulating im- 
provements in the arts of industry. Abnormal gains, of the na- 
ture of prizes or bonuses, are thus obtainable by individual em- 
ployment, or by groups of employers, who are pioneers in some 
new industry or in the introduction of some new invention or 
other economy. But these rewards of special merit, it is argued, 
are not lasting, but disappear so soon as they have performed 
their socially serviceable function of drawing into the favoured 
emplo3mients the increased quantity of new productive power 
which will restore the equality of productivity and remuneration 
' at the margins '. 

Now, even were it possible to accept this rehabilitation of 
laissez-faire theory, accepting this equalising 'tendency' as pre- 
dominant and normal, and classifying all opposing tendencies 



176 WORK AND WEALTH 

as mere friction, it would not supply a law of distribution that 
would satisfy the conditions of our 'human' law. It would af- 
ford no security of distribution according to 'needs', or human 
capacity of utilising wealth for the promotion of the highest 
standard of individual and social welfare. It would remain an 
ideally good distribution only in the sense that it would so ap- 
portion the product as to furnish to all producers a stimulus 
which would evoke their best productive powers, so contributing 
to maximise the aggregate production of marketable goods. Only 
so far as man was regarded as an economic being, concerned 
merely in the nourishment and improvement of his marketable 
wealth-producing faculties, would it be a sound economy. 

Just as in the case of the older, cruder 'freedom of competi- 
tion', it rests upon the fundamental assumption that all the prod- 
uct, the real income of the community, will be absorbed in 'pro- 
ductive consumption', defra3dng the bare 'costs' of maintaining 
and improving the productive powers of capital, labour and 
ability, for the further production of objective economic goods 
and services. It would remain open to the objection that it as- 
sumed an identity of economic wealth and human welfare which 
is inadmissible, and that it refused to provide that subordination 
of economic production and consumption to the larger concep- 
tion of human welfare which sound principles of humanity re- 
quire. Though all work might be most productively applied, it 
might still contain excessive elements of human cost, and though 
all products were productively consumed many of the finer needs 
of individual men and of society might still remain without 
satisfaction. 

§ 9. But the full divergence between the operation of the 
actual economic law of distribution and the human law can best 
be discovered by unmasking the fundamental falsehood of all 
forms of the laissez-faire or competitive economy, viz. the as- 
sumption that the national income tends to be distributed in a 
just economy of costs. Is there in fact any operative law which 
distributes or 'tends' to distribute the £2,000,000,000 worth of 
goods that form our income, so that all, or even most of it, acts 
as a necessary food and stimulus to evoke the full and best pro- 
ductive work of those who receive it? Or, if there are failures 



THE HUMAN LAW OF DISTRIBUTION 177 

in this economical distribution, are they so few, so small, and so 
ephemeral, that they may reasonably be treated as 'friction', or 
as that admixture of error or waste which is unavoidable in all 
human arrangements? 

Now it is of course true that the national income must con- 
tinually provide for the subsistence of the labour, ability and 
capital, required to maintain the existing structure of industry 
and the current output of goods and services. The brain-workers 
and the hand-workers of every sort and grade, from artist and 
inventor to routine labourer, must be continuously supplied with 
the material and non-material consumables sufficient to enable 
them to replace in their own persons, or through their offspring, 
the physical and psychical wear and tear involved in their work. 
The fertility of the soil, the raw materials, fuel, buildings, tools 
and machines, requisite in the various productive processes, 
must similarly be maintained out of the current output. These 
bare costs of subsistence, the wages, salaries and depreciation 
funds necessary to replace the wear and tear of the human and 
material agents of production, are a first charge upon the na- 
tional dividend. To refuse the payments which provide this sub- 
sistence would be suicidal on the part of the administrators of 
the income. They rank, from the standpoint of society^ as costs 
of production. If the product which results from the productive 
use of these factors exceeds what is necessary to defray these 
costs, the surplus may be employed in either of two ways. It 
may be distributed among the productive classes in extra- 
payments so as to evoke by a set of economically-adjusted 
stimuli such enlarged or improved efiSciency as will provide for 
a larger or a better product in the future. In a society of a pro- 
gressive order where the numbers or the wholesome needs, or 
both, are on the increase, no surplus, however large, can be ex- 
cessive for such provision. A socially sound and just distribu- 
tion of the surplus would be one which absorbed it entirely in 
what may be called the 'costs of growth'. This, however, does 
not by any means imply that the whole of the surplus must ad- 

1 From the standpoint of the individual business firm 'costs of production' may 
include many higher rates of payments, necessary under the actual conditions of 
competitive industry to secure the use of the required agents. 



178 WORK AND WEALTH 

vantageously be distributed directly among the individual owners 
of labour, ability or saving power, in order to evoke from them the 
maximum extension of their several productive powers. A good 
deal of the surplus may, indeed, be thus applied in higher in- 
dividual incomes of producers. But the State, politically or- 
ganised society, must look to the ' surplus ' for its costs, not only 
of upkeep but of progress. For whatever part we may assign to 
the State in aiding industrial production, all will agree that much 
of its work, in the protection and improvement of the conditions 
of life, is essential to the stability and progress of industry, and 
involves * costs ' which can only be met by a participation in the 
industrial dividend. It may even be urged that the claims of 
the State to maintenance and progress are equal to the claims 
of individuals upon the surplus. For it is evident that industrial 
progress demands that both individual and social stimuli and 
nutriment of progress must be provided from the surplus by 
some considered adjustment of their several claims. A surplus, 
thus properly apportioned in extra-subsistence wages and other 
payments to producers and in public income, would be produc- 
tively expended and would thus contribute to the maximum 
promotion of human welfare.^ 

§ lo. But though in such a society as ours a certain part of 
the surplus is thus 'productively' applied, and is represented in 
industrial and human progress, a large part is not so expended 
in 'costs of progress'. A large quantity of 'surplus' is every- 
where diverted into unproductive channels. The income which 
should go to raise the efficiency of labour, to evoke more saving, 
and to improve the public services, is largely taken by private 
owners of some factor of production who are in a position to ex- 
tort from society a payment which evokes no increase of produc- 
tive efficacy, but is sheer waste. This power to extort super- 
fluous and unearned income is at the root of every social-economic 
malady. Indeed, it often goes beyond the diversion of surplus 
from productive into unproductive channels. It often encroaches 
upon costs of maintenance. For the vital statistics of large 

^ For it must be kept in mind that the 'productive expenditure' to which refer- 
ence is here made refers ultimately to a standard not of market but of himian 
values. 



THE HUMAN LAW OF DISTRIBUTION 179 

classes of labour show that the food, housing and other elements 
of real wages, are insufficient for the upkeep of a normal working 
life and for the rearing of a healthy and efficient offspring. This 
means that surplus is actually eating into 'costs', in that the 
costs of maintenance, which sound business administration au- 
tomatically secures for the capital employed, are not secured for 
the labour. The reason why this policy, which from the social 
standpoint is suicidal, can nevertheless be practised, is obvious. 
For the capital 'belongs to' the business, in a sense in which the 
labour does not. A sweating economy which 'lets down' the 
instruments of capital is of necessity unprofitable to the individ- 
ual firms : a similar sweating economy applied to the instruments 
of labour need not be unprofitable. To the nation as a whole, 
indeed, regarded merely as a goods-producing body, any such 
withholding of the true costs of maintenance must be unprofit- 
able. But there are businesses, or trades, where 'sweated' la- 
bour may be profitable to the employers or the owners of capital. 
There are many more where such a wage-policy, though not 
really profitable, appears so, and is actually practised as ' sound 
business '. How large a proportion of the 14,000,000 wage-earners 
whose incomes are paid out of our £2,000,000,000 come under 
this category of ' sweated ' workers, we cannot here profitably dis- 
cuss. But, apart from the great bulk of casual workers in all less 
skilled trades, there are large strata of skilled and trained adult- 
labour in the staple trades of the country which are not paid a 
full subsistence wage. Such are the large bodies of women em- 
ployed in factories and workshops and in retail trade, at wages 
varying between eight and fourteen shillings. Indeed, it may 
safely be asserted that the average wage of an adult working- 
woman in this country, not in domestic service, is a sweating 
wage, definitely below true economic maintenance, and still more 
below the decent human requirements of Hfe. The same state- 
ment also holds of the wage of agricultural labour in most dis- 
tricts of the middle and southern counties of England. In such 
employments the true economic 'costs' of maintenance are not 
provided out of the present distribution of the national income. 
Of a far wider range of labour is it true that the true wages of 
progressive efficiency, which we have seen are vital to the eco- 



i8o WORK AND WEALTH 

nomic progress of the nation, are withheld. Though this depriva- 
tion does not form the whole case for labour as stated from the 
'human' standpoint, it constitutes the heaviest economic count 
against the current distribution of wealth. The full physical and 
spiritual nutriment, the material comforts, the education, leisure, 
recreation, mobility and broad experience of hfe, requisite for 
an alert, resourceful, intelligent, responsible, progressive working- 
class, are not provided either by the present wage-system, or by 
the growing supplements which the communal action of the State 
and the municipality are making to the individual incomes of 
the workers. Out of the £2,000,000,000 a wholly insufficient sum 
is distributed in wages of progressive efi&ciency for labour. 

In certain other respects also the current 'costs' distribution 
is exceedingly defective. The saving which goes to provide for 
the enlargement ol the capital structure of industry is very waste- 
fully provided. A large proportion of such savings as are con- 
tributed out of working-class incomes involves an encroachment 
upon their costs of progressive efficiency, and represents, from 
the standpoint both of the individual family and of society, bad 
economy. Moreover, the methods of collection and of applica- 
tion of such capital are so wasteful and so insecure as to render 
working-class thrift a byword in the annals of business admin- 
istration. 

§ II. But these deficiencies in the economy of 'costs' can only 
be understood by a study of that large section of the national 
income which in its distribution furnishes no food or stimulus 
whatever to any form of productive energy. Even in the ideal- 
ist laissez-faire economics we saw that rent of land was distin- 
guished from the wages, interest and profits, which constituted 
the 'costs of production', and was described as 'surplus'. . It 
was recognised that, where land was required for any productive 
purpose, its owners would receive in payment for its use any por- 
tion of the product, or its selling value, which remained over after 
the competitively determined 'costs' of capital and labour had 
been defrayed. The payment was economically necessary be- 
cause suitable land for most industrial uses was scarce, and the 
amount of the payment would depend upon how much was left 
when capital and labour had received their share. For the land- 



THE HUMAN LAW OF DISTRIBUTION i8i 

lord would take all the surplus. There are those who still insist 
that the owners of land are everywhere in this position of resid- 
uary legatees. Land, they think, is always relatively scarce, 
capital and labour always and everywhere relatively abundant. 
Free competition then between the owners of the relatively abun- 
dant factors will keep down the price for them to bare 'costs', 
leaving a maximum amount of surplus which the so-called land 
'monopolists' will receive as rent. This surplus evokes no pro- 
ductivity from the soil or its owners; its payment does nothing 
to stimulate any art of industry. But, if the landowner did not 
take it, and it was kept by farmers as profits, or by labourers as 
wages, it would be just as wasteful from the productive stand- 
point, as if it passed as rent, for, upon the hypothesis of such 
economists, the full competitive wages and profits are the only 
payment entitled to count as cost, and no addition to such pay- 
ments would increase the productivity of capital or labour. 

§ 12. Now though there have been times and countries in 
which rent of land was the only considerable surplus, this is not 
the case in any developed industrial community to-day. Other 
factors of production, capital, ability, or even in some instances 
labour, share with land the power to extort scarcity prices. 

The hypothetical abundance, mobility and freedom of com- 
petition, which should prevail among all owners of capital, abil- 
ity and labour, keeping down all their remuneration to a common 
minimum, are everywhere falsified by industrial facts. At va- 
rious points in industry capital or managerial ability is found 
strongly entrenched against the competition of outsiders, and 
able to set hmits upon internal competition. Wherever this con- 
dition is found, the owners of the capital or the abiHty so advan- 
tageously placed are able to obtain a 'surplus', which, in its 
origin and its economic nature and effects, nowise differs from 
the economic rents of land. The fluidity and complete freedom 
which appear to attach to the term capital, so long as we treat 
it in its abstract financial character, disappear as soon as for 
capital we substitute certain skilfully made machinery con- 
structed under patent rights and operated by more or less secret 
processes, turning out, with the assistance of carefully trained 
and organised labour, goods which enjoy a half-superstitious 



i82 WORK AND WEALTH 

fame and special facilities of market. An examination of the 
capitalist system will disclose in every field of industry nmner- 
ous instances of businesses or groups of businesses, sometimes 
constituting whole trades, which by reason of some advantage 
in obtaining raw materials, transport or marketing facilities, 
public contracts, legal privilege or protection, by using some su- 
perior process of manufacture, skill in advertising, established 
reputation, financial backing, or by sheer magnitude of opera- 
tions, are screened from the full force of free competition, and are 
earning interest and profits far exceeding the minimum. Some 
such businesses or groups of businesses possess a virtual monopoly 
of the market, and can control output and prices, so as to secure 
abnormal dividends. Such control is, to be sure, never absolute, 
its control of prices being subject to two checks, the restriction 
of demand which attends every rise of prices, and the increasing 
probabihty of competition springing up if profits are too high. 
But quahfied monopolies, earning dividends far larger than are 
economically necessary to support the required capital, are 
everywhere in evidence. Trusts, cartels, pools, combines, con- 
ferences, and trade agreements of various potency and strin- 
gency, pervade the more highly organised industries, substitut- 
ing the principle of combination for that of competition. In all 
major branches of the transport trade by land and sea, in large 
sections of the mining industry, in the iron and steel industry 
and in many branches of machine-making, in many of the spe- 
cialised textile trades, in the chemical and other manufactures 
where special scientific knowledge counts, in many departments 
of wholesale and retail distribution, and, last not least, in bank- 
ing, finance and insurance, freedom of investment and of com- 
petition have virtually disappeared. To assume that fresh 
streams of capital, labour and business abihty, have hberty to 
enter these fields of enterprise, and by their equal competition 
with the businesses already in possession so to increase the out- 
put, lower selling prices and keep interest and profits at a bare 
'costs' level, is a childish travesty of the known condition of 
these trades. To affirm that such mobility and liberty of com- 
petition is the sole normal 'tendency', and that the monopolis- 
tic and combinative forces merely represent friction, is so grave 



THE HUMAN LAW OF DISTRIBUTION 183 

a falsification of the facts as to put out of court the whole method 
of economic interpretation which is based thereon. Concrete 
capital has none of the quaHties assigned to the abstract capital 
of these economists. It is neither infinitely divisible, nor abso- 
lutely mobile, nor accurately directed, nor legally and econom- 
ically ' free ' to dispose itself in any part of the industrial system 
where the current interest or profit exceeds the average. Over 
large tracts of industry combination is more normal and more 
potent than competition, and where this is not the case, the most 
competitive trades will be found honeycombed with obstructive 
clots, businesses enjoying special advantages and earning corre- 
spondingly high profits. 

§ 13. Because certain qualities of business ability are requi- 
site, to wit astuteness, keenness of judgment, calculating power, 
determination, capacity for organisation and executive ability, 
it is sometimes claimed that the high rates of profit which accrue 
from such businesses as we have indicated are really the creation, 
not of monopoly or combination, but of the talents of these entre- 
preneurs. But even though it be admitted that some such ability 
is essential to produce or to maintain a successful combination, 
can the entire profits of such a combination be imputed to this 
ability or regarded as its natural and proper reward? Take the 
common instance of the 'forestaller', who stops the supply of 
some commodity on its way to a market, secures the whole supply 
at competitive prices from the various contributors, and then 
sells it at a monopoly price fixed by himself. Are the profits of 
this corner a product of abiHty and a reward of ability, and not a 
'surplus' representing an artificially contrived scarcity value? 
Or take the case of a contracting firm, which persuades all the 
other firms in a position to compete to come into an arrange- 
ment as to a minimum tender. Are the extra profits due to such 
an arrangement to be regarded as wages of ability, because some 
tact was needed to work the thing? But suppose we granted 
the whole contention, and agreed that the extra dividends paid 
to shareholders in favoured or protected businesses were really 
produced by the ability of the entrepreneur or manager, what 
then? It is not proved that these extra profits are 'costs', not 
'surplus'. On the contrary, the fact that they can be taken as 



i84 WORK AND WEALTH 

extra dividends or bonuses by the owners of the capital, instead 
of passing in 'wages of ability' to the entrepreneur, is proof posi- 
tive that they are surplus. For if they were a subsistence wage 
of ability, or even a 'prize', essential to evoke some special out- 
put of skill or energy, they could not be thus diverted from the 
entrepreneur to the shareholders. In fact, there is no reason to 
suppose that any very rare or conspicuous ability is evinced in 
working a successful pool or combine, or even in organising a 
successful business. Still less is there reason to suppose that the 
profits attending such an enterprise are in any way proportion- 
ate to the skill or energy of the entrepreneur. Everyone is aware 
that the contrary is the case. Indeed, so far as scientific, pro- 
fessional, and business ability is industrially useful and has a 
claim to income, enquiry shows that there is no better security 
for mobility, freedom of competition and equality of payment, 
than in the case of capital. InequaHties of economic conditions 
between various classes of our population, involving inequalities 
of nurture and of education, and of every other sort of 'oppor- 
tunity' relevant to the discovery, training, equipment and suc- 
cess of 'natural abihty', set up a series of almost impenetrable 
barriers to the free flow of natural abihty throughout the in- 
dustrial system, and give rise to an elaborate hierarchy of re- 
stricted employments where the rates of remuneration repre- 
sent, not any inherent services of ability, but the degree of the 
restriction in relation to the importance of the work. All such 
advantages of opportunity are reflected in rates of payment for 
' ability ' which carry elements of ' surplus. ' 

Though some portion of the higher remuneration paid to suc- 
cessful professional workers may be regarded as interest upon 
the capital-outlay of their education and training, there is no 
reason to hold that the extra payment is adjusted to the costs 
of this outlay. Still less can any such argument avail in the case 
of high business profits. Though abihty and expensive training 
may be favouring conditions to such financial success, restricted 
competition must be accounted the principal direct determinant 
of all such extra payments. 

§ 14. There remains one final demurrer to our doctrine of the 
unproductive 'surplus'. If you take into consideration, it is 



THE HUMAN LAW OF DISTRIBUTION 185 

urged, all the unsuccessful as well as the successful businesses, 
you will find that the average return for capital and for business 
ability is low enough, not in fact more than represents a bare 
'costs' economy. Similarly with the high incomes earned by 
the few successful men in the professions and in other walks of 
life. Set the failures fairly against the successes and there is no 
net ' surplus ' to take account of. 

But this contention is one more abuse of the method of aver- 
ages. To the charge that one man is overpaid, it is no answer 
that another is underpaid. To the statement that surplus 
emerges in the payment for some orders of capital or abihty it 
is no answer to say that other capital and ability does not even 
get its true 'costs' or subsistence wages. The force of this re- 
buttal is still further strengthened when it is reaHsed to what 
extent the success of those who succeed is directly responsible 
for the failure of those who fail. For the economic strength of 
those whose superior advantages have secured for them a posi- 
tion of control will necessarily operate to make the competition 
of outsiders difficult and their failure probable. Indeed, a por- 
tion of the gains which combination yields will often be con- 
sciously applied to kill the competition of outsiders, or to re- 
strict their trade to the less profitable or the more precarious 
forms of enterprise. But even where this business policy is not 
adopted, the very fact that strong firms and 'combines' control 
many markets, must, by limiting the area of free competition, 
intensify the competition within that area and so cause the fail- 
ures to be numerous. 

The contention, that the excessive profits of successful firms 
are balanced and in some way cancelled by the losses of those 
that fail, is also contradicted by the psychology of the case. If 
it could be shown that the chance of winning these high gains 
was in fact a necessary inducement to the winners to stake their 
capital and business capacity in an inherently risky line of enter- 
prise, there might be some force in this plea. But to the men 
who achieve these successes business is not a simple game of 
hazard in which they have merely the same chance as the others. 
Success is commonly achieved by force, strategy and the posses- 
sion of known advantages, and is used to strengthen these ad- 



i86 WORK AND WEALTH 

vantages and so to increase continuously the 'pull' by which 
they accumulate their gains and ruin their would-be competitors. 
Although tight forms of monopoly are very rare, loose or partial 
restrictions upon competition are very numerous and often very 
profitable. All these extra gains, issuing from various forms of 
natural or contrived scarcity in all sorts of industries, are rightly 
classed as unproductive surplus. Many of them are as constant 
and as certain as the economic rents of land, arise in the same 
way from a limitation of some productive factor, and are 'un- 
earned' income in the same sense of that term. Other of these 
gains are more fluctuating, proceeding from less stable forms of 
privilege or combination, but while they exist they equally be- 
long to unproductive 'surplus'.^ 

§ 15. The distinction between that portion of the social in- 
come which goes as necessary payments to support and evoke 
the energies of body and mind of wealth-producers, i. e. costs 
of production, and that which goes as unproductive 'surplus' 
to those who, possessing some necessary instrument of produc- 
tion that is relatively scarce, can exact a scarcity price, is fun- 
damental in a valuation of industry. For this surplus not only 
represents sheer economic waste, regarded from the social stand- 
point, but it can be shown to be directly responsible, as an ef- 
ficient cause, for most of those particular maladies in our cur- 
rent processes of production and consumption which impede the 
economic and the human progress of the nation. 

For if our analysis of this surplus is correct, it consists in the 
seizure of a large portion of the fruits of individual and social 
productive energies, required for the full support and further 

1 Economists, following the classical distinction made by Adam Smith in the case 
of land-values, may break up the surplus into various species of scarcity rents on 
the one hand and differential rents on the other. A scarcity or 'specific' rent will 
occur when the whole supply of some factor of production, e. g. all the land available 
for some particular use, or all the capital employed in some trade, is in a position to 
take a payment higher than is obtainable where more land or capital is available 
for this particular use than is required to turn out the supply of goods that is actually 
sold. The worst hop land in use in England obtains a positive rent, the worst 
equipped ships in the Atlantic combine obtain a surplus-profit: better acres of hop 
land, better-equipped ships obtain a differential rent or profit in addition. Both 
specific gain and differential gain are surplus, and the basis of each is a scarcity of 
supply and a restraint of competition. 



THE HUMAN LAW OF DISTRIBUTION 187 

stimulation of these energies and for the wider human life which 
they are designed to serve, and their assignment to persons 
who have not helped to make them, do not need them, and can- 
not use them. The payment of surplus takes large sections of 
the income, needed to raise the economic and human efficiency 
of the working-classes, or to enable society to enlarge the scope 
and to improve the quahty of the public services, and disposes 
them in ways that are not merely wasteful but injurious. In 
effect, all the excessive human costs of production and all the 
defective human utilities of consumption, which our separate 
analysis of the two processes disclosed, find their concrete and 
condensed expression in this 'surplus'. The chief injuries it 
causes may be summarised as follows : 

(i) Flowing abundantly as 'unearned' income into the posses- 
sion of 'wealthy' individuals and classes, it thereby causes large 
quantities of the national income to be consumed with Httle or 
no benefit. For much, if not most, of this surplus, being devoted 
to luxury, waste, extravagance and 'illth', furnishes by its ex- 
penditure not human utility but human 'cost', not an enhance- 
ment but a diminution of the sum of human welfare. 

(2) By enabhng its recipients to disobey the sound biological 
and moral precept, 'In the sweat of thy face thou shalt eat 
bread,' it calls into being and sustains a leisured or unem- 
ployed class whose existence represents a loss of productive 
energy and of wealth-production to the nation. 

(3) The evil prestige and attraction of the life of sensational 
frivoHty this idle class is disposed to lead tends by suggestion 
to sap the wholesome respect for work in the standards of the 
rest of the community, and to encourage by servile imitation in- 
jurious or wasteful methods of expenditure. 

(4) The economic necessity of producing this surplus imposes 
excessive toil upon the productive classes, being directly re- 
sponsible for the long hours and speeding-up which constitute 
the heaviest burden of human costs. The direction which the 
expenditure of the surplus gives to capital and labour degrades 
the character of large bodies of workers by setting them to futile, 
frivolous, vicious or servile tasks. 

(5) The disturbing irregularity of the trades which supply 



i88 WORK AND WEALTH 

the capricious and ever-shifting consumption, upon which the 
'surplus' is so largely spent, imposes upon the workers a great 
cost in the shape of irregularity of employment, and a consider- 
able burden of costly saving by way of insurance against this 
irregularity. 

(6) By stamping with the badge of irrationality and inequity 
the general process of apportionment of income, the surplus im- 
pairs that spirit of human confidence and that consciousness of 
human solidarity of interests which are the best stimuK of in- 
dividual and social progress. 

The surplus element in private income thus represents the hu- 
man loss from defects in the current distribution of wealth, not 
only the loss from wasteful and injurious consumption but from 
wasteful and injurious production, an exaggeration of human 
costs and a diminution of human utilities. The primary object 
of all social-economic reforms should be to dissipate this surplus 
and to secure its apportionment partly as useful income for in- 
dividual producers, partly as useful income for society, so that, 
instead of poisoning the social organism as it does now, it may 
supply fuller nourishment and stimulus to the life of that or- 
ganism and its cells. 

Thus directed, partly into higher wages of efficiency for 
workers, partly into further income for the enrichment of the 
common life, the 'surplus' will in effect cease to be surplus, 
being completely absorbed in satisfying the human requirements 
of individuals and society. For not only will it furnish the ex- 
penditure required to bring the standard of consumption of all 
grades of workers up to the level of a full satisfaction of human 
needs, but it will establish an entirely new conception of public 
income. For it will be recognised that the public revenue, taken 
either by taxation or as profits of public industry, is earned by 
public work precisely as the revenue of individuals is earned by 
private work, and is required for pubKc consumption just as 
private income is required for private consumption. Thus the 
whole of what now figures as a wasteful ' surplus ' would be applied 
in productive consumption. 

The scope of the operation of this organic law, of course, 
widely transcends this special application to the distribution 



THE HUMAN LAW OF DISTRIBUTION 189 

of economic income. It is the general law of order and of pro- 
gress in all departments of organic activity. But for our task, 
that of a human valuation of industry, its worth is supreme. For 
in the application of the organic law of distribution all the great 
antagonisms which loom so big as social Problems, Luxury and 
Poverty, Toil and Idleness, The Individual and Society, Au- 
thority and Liberty, find their solution.^ 

1 For a detailed and more technical defence of the fundamentally important dis- 
tinction between 'costs' and 'surplus' and for a closer analysis of the sources of 
'unproductive surplus ', readers may be referred to the author's earlier work, The In- 
dustrial System: an enquiry into earned and unearned income. (Longman's 2nd and 
revised edition, 1909). 



CHAPTER XIII 

THE HXJMAN CLAIMS OF LABOUR 

§ I. The validity of the human law of distribution is well 
tested by considering the light it sheds upon the modern claims 
of Labour and the Movement which is endeavouring to realise 
these claims. For the significance of the Labour Movement 
will continue to be misunderstood so long as it is regarded as a 
mere demand for a larger quantity of wages and of leisure, im- 
portant as these objects are. The real demand of Labour is 
at once more radical and more human. It is a demand that 
Labour shall no longer be bought and sold as a dead commodity 
subject to the fluctuations of Demand and Supply in the market, 
but that its remuneration shall be regulated on the basis of the 
human needs of a family living in a civilised country. 

At present most sorts of labourers are paid according to the 
quantity of labour-power they give out, and according to the 
market-price set upon a unit of each several sort of labour- 
power. This means that the actual weekly earnings of some 
grades of labourer are much higher than those of other grades, 
not because the work takes more out of them, or because it in- 
volves a higher standard of living, but because some natural, 
some fortuitous, or some organised scarcity of supply exists 
in the former grades, while there is abundance of supply in the 
latter.^ Moreover, the weekly earnings for any of these sorts of 
labour will vary from week to week, from month to month, or 
year to year, with the variations of Supply and Demand in the 
Labour Market. The income of the working family will thus 
vary for reasons utterly beyond its control, though its require- 
ments for economic and human efficiency show no such varia- 
tion. Thus there is no security for any class standard of living. 

Within each class or grade of labour there will be variations 

1 The width of variations in the weekly earnings, involving in most instances a 
nearly corresponding variety of family income, may be illustrated by the following 

190 



THE HUMAN CLAIMS OF LABOUR 



191 



of the individual family wage, based on the amount of labour- 
power actually given out in the week. A less efifective worker, 

estimate compiled by Mr. Webb, from a careful analysis of official wage returns. 
New Statesman, May 10, 1913. 

TABLE SHOWING ESTIMATED EARNINGS OF EMPLOYED MANUAL 
WORKING WAGE-EARNERS IN THE UNITED KINGDOM IN THE 
YEAR 1912 

Men 



Class 


Numbers 


Average rate 

of earnings 

in a full week 

{including all 

emoluments) 


Average wages 

bill for a full 

week 


Yearly wages 
bill {allowing 
5 weeks for 
short time, 
sickness, in- 
voluntary holi- 
days and un- 
employment) 


Men hi Situations: 
Below 15s 


320,000.. 4% 

640,000 . . 8% 

1,600,000. .20% 

1,680,000. .21% 

1,680,000. .21% 

1,040,000. .13% 

560,000. . 7% 

480,000 . . 6% 


s.d. 
(abt.) 13.0 
(abt.) 18.0 
22.6 
27.6 
32.6 
37-6 
42.6 
50.0 


Million £ 
0.21 
0.58 
1.80 
2.31 
2-73 
1-95 
1.20 
1.20 


Million £ 
10 


15s. to 20s 


27 


20s. to 25s 


85 
109 
128 


2^3. to ^OS 


^os. to ^i^S 


^^S. to AOS 


92 


40s. to 45s 


Over 45s 


56}4 






Men in Situations . . 
Casuals 


8,000,000 . . 100% 
700,000 


30.0 
12.0 


12.0 
0.42 


564 
18.5 






Adult Males 


8,700,000 


28.4 


12.42 


582.5 


Boys 


1,900,000 


10. 


0-95 


44.0 






All Males 


10,600,000 


25.3 


13-38 


626.5 











Average Earnings per Adult Man throughout the year: {^7T^) £66.95 or £i-5-9 
per week. 

Women 



Class 


Numbers 


Average earn- 
ings in a full 
week 


Average 

weekly wages 

bill for a ftdl 

week 


Yearly wages 

bill {net as 

above) 


Women 

Girls 


3,000,000 

1,500,000 

100,000 


s.d. 

12.0 
8.0 
3-6 


Million £ 
1.8 
0.6 
0.015 


Million £ 
85.0 
28.0 


Casuals 


o-S 






All Females 


4,600,000 


10.6 


2.415 


II3-5 



Average Earnings per Adult Woman throughout the year: {—) £27.58, or los. 
7d. per week. 

Total Wages Bill (both sexes) for the year, net: £740,000,000. 



192 WORK AND WEALTH 

even though he puts out as much effort, will earn less money than 
a more effective. This seems necessary, reasonable and even 
just, so long as we accept the ordinary view that labour should 
be bought and sold like any other commodity. 

But once accept the view that to buy labour-power, like other 
commodities, at a price determined purely by relations of Supply 
and Demand, is a policy dangerous to the life and well-being of 
the individual whose labour-power is thus bought and sold, to 
those of his family and of society, your attitude towards the 
labour-movement in general, and even to certain demands which 
at first sight seem unreasonable, will undergo a great change. 

The fundamental assumption of the Labour Movement, in 
its demands for reformed remuneration, is that the private hu- 
man needs of a working family should be regularly and securely 
met out of weekly pay. The life and health of the family, and 
that sense of security which is essential to sound character and 
regular habits, to the exercise of reasonable foresight, and the 
formation and execution of reasonable plans, all hinge upon this 
central demand for a sufficiency and regularity of weekly income 
based upon the human needs of a family. 

§ 2, This explains ahke the working-class objections to piece- 
work, the demand for a minimum wage, and the policy of limita- 
tion of individual output. For piece-work, even more than 
time-work, is based upon a total ignoring of the human condi- 
tions which affect the giving out of labour-power. It is the plain- 
est and most logical assertion of the commodity view of labour, 
the most complete denial that the human needs of the worker 
have any claim to determine what he should be paid. 

So firmly-rooted in the breast of the ordinary non-working 
man, and of many working-men, is the notion that a man, who 
has produced twice as large an output as another man, ought, as 
a simple matter of right or justice, to receive a payment twice as 
large, that it is very difiicult to dislodge it. It represents the 
greatest triumph of the business point of view over humanity. 
If a m^an has done twice as much, of course he ought to receive 
twice as much! It seems an ethical truism. And yet I venture 
to affirm that it has nothing ethical in it. It has assumed this 
moral guise because of a deep distrust of human nature which 



THE HUMAN CLAIMS OF LABOUR 193 

it expresses. How will you get a man to do his best unless you 
pay him according to the amount he does? It is this purely prac- 
tical consideration that has imposed upon the piece-work system 
the appearance of axiomatic justice. 

It is not difficult to strip off the spurious ethics of the princi- 
ple. You say that piece-wages or payment by result is right be- 
cause it induces men to do their best. But what do we mean by 
'doing their best'? A weak man may hew one ton of coals while 
a strong man may hew two. Has not the former 'done his best' 
equally with the latter? The strength of a strong man, the nat- 
ural or even the acquired skill of a skilful man, cannot be as- 
sumed as a personal merit which deserves reward in the terms of 
paj^ment. If there is merit anywhere, it is in the effort, not in 
the achievement or product, and piece-wages measure only the 
latter. 

No! there is nothing inherently just in the piece-wage system. 
Its real defence is that it is the most practical way of getting men 
to work as hard as they can : it is a check on skulking and sugar- 
ing. It assumes that no other effective motive can be made op- 
erative in business except quantity of payment. 

§ 3. As Ruskin and many others have remarked, the lie is 
given to this assumption in an increasing number of kinds of 
work where the highest qualities of human power, the finest 
sorts of mental skill and responsibility, are involved. Public 
servants of all grades, from Cabinet Ministers and Judges down 
to municipal dustmen, are paid by salaries, not by piece-wages. 
The same is true of the more remunerative and more responsible 
work in private businesses. No Government, no private firm, 
buys the services of its most valuable employees at the lowest 
market-price, or attempts to apply to them a piece-work scale. 
It would not pay them to do so, and they know it. Nor is this 
merely because some sorts of work do not easily admit of being 
measured by the piece. It would be possible to pay Judges, as 
counsel are paid, by the case: Cabinet Ministers might be paid 
on piece-wages for Law^s measured by the number or length of 
their clauses. The chief reason for adopting payment by fixed 
salary is that it is reckoned a wise mode of securing good individ- 
ual services. It is recognised that each piece of work will be 



194 WORK AND WEALTH 

better done, if the workers set about it in a thoroughly disinter- 
ested manner, concentrated in their thoughts and feelings en- 
tirely on the work itself, and not entangled in the consideration 
of what they are to get out of it. This is supposed to be the 
difference between the professional man and the tradesman, 
that the former performs a function and incidentally receives a 
fee, while the latter, by the very acts of buying and selling that 
constitute his business, keeps his mind set upon the profit from 
each several transaction. 

But the fixed and guaranteed salary for public servants has 
another ground. It may profit a business firm to practise an 
economy of sweating, to drive its employees and consume their 
health and strength by a few years' excessive toil, to take on new 
casual workers for brief spurts of trade, to sack employees ruth- 
lessly, as soon as trade begins to flag, or their individual powers 
of work are impaired by age. A piece-work system, with no 
guarantee of employment or of weekly wage, may be a sound 
business economy for a private firm. It cannot be a sound 
economy for a State or a Municipality. 

For a large and increasing share of the work and the expendi- 
ture of most States and Municipalities is apphed in trying to 
mend or alleviate damages or dangers to the health, security, 
intelligence, and character of the workers and their families, 
arising from insufi&ciency of work and wages or other defects of 
private industrialism. It would obviously be bad public economy 
to break down the lives and homes of public employees by under- 
paying or overworking them, or by dismissing and leaving them 
to starve when work was slack. For what was saved in the wage- 
bill of the particular department, would be squandered in poor- 
law, police, hospitals, old-age pensions, invalidity and employ- 
ment relief. Nor is that all. A mass of ill-paid, ill-housed 
workers, alternately overworked and out of work, stands as a 
chief barrier in every one of those paths of social progress and 
national development which modern statecraft sets itself to 
follow. The low wage of unskilled labour is to-day a source of 
infinite waste of the forces of national education. Still keeping 
our argument upon the narrowest fines of economy, we plainly 
reafise that the financial resources, upon which the State can 



THE HUMAN CLAIMS OF LABOUR 195 

draw for all her services, depend in the last resort upon the 
general economic efficiency of the working population, and that 
a system of public employment which was, however indirectly, 
detrimental to this health, longevity and intelligence, would 
rank as bad business from the public standpoint. 

It is possible that in this country the salary mode of payment 
is gaining ground. Apart from the pubhc services, national and 
municipal, which now employ some 7 per cent of the total em- 
ployed population, the great transport and the distributive in- 
dustries are almost entirely run upon the salary basis. These 
departments of industry are constantly increasing, not only in 
absolute size, but in the proportion of the total employment they 
afford. To them must be added the large class of domestic 
service. Such great salaried services cannot, indeed, be claimed 
as triumphs for the organic principle of distribution, or payment 
according to needs. For the most part they are very unsatis- 
factory^ modifications of the piece-wage or commodity view of 
labour. For, except for the small higher grades of officials, they 
mostly retain the two chief defects of the ordinary wage-system, 
a payment of weekly income not based on a proper computation 
of human needs, and a lack of adequate security of tenure. Over 
a large part of the field of industry and commerce where weekly 
fixed salaries are paid, there exists a flagrant disregard for all 
considerations of human subsistence. Some of the worse, though 
not the worst, forms of 'sweating' are found in shops, workshops 
and factories where women are employed on weekly salaries. 

None the less, it remains true that the salary is a more ra- 
tional form of payment for labour than the time or piece wage, 
and that, as the humanisation of industry proceeds, it will more 
and more displace the wage-system. For where salaries are paid, 
the consideration of needs or subsistence does tend always to 
qualify the mere commodity view of labour. 

Piece-wage or time-wage ignores the worker as a human being 
and the supporter of a family: it ignores him as a personality 
and regards him merely as an instrument for giving out units of 
productive power to be paid for on the same terms as the units 
of mechanical power used in working machinery. 

§ 4. The Labour Movement insists that the personal and 



196 WORK AND WEALTH 

human factor is fundamental as a condition in the labour bar- 
gain. If labour is treated as a mere commodity, its price affords 
no security of life to the labourer. It may not find a customer 
at all, and so he starves and with him his family, the future 
supply of labour. Or, left to the fluctuations of the market, it 
may sell at a price which is insufhcient for his maintenance. The 
fluctuations of price in all other markets involve only the pe- 
cuniary profit or loss of those who sell, fluctuations of the price 
of labour involve the existence and well-being of human families 
and of the nation. Hence the attack of organised labour on this 
whole conception of the labour-market, and the demand that the 
remuneration of labour shall not be left to the higgling of a market. 

The chief fight is for a secure weekly income, or for conditions 
of employment which lead up to this. A minimum or a living 
wage is the usual name given to this demand. Complaint is 
made of the vagueness of the demand. But this vagueness does 
not make the demand unreasonable. A living wage indeed is 
elastic as life itself: it expands and will continue to expand, with 
the development of life for the workers. But what in effect is 
meant at the present by a Hving or subsistence wage is such a 
regular weekly sum as suffices to maintain the ordinary working 
family in health and economic efficiency. 

It is contended that no purchase of labour should be permitted 
which entails the degradation of that standard. When a mini- 
mum rate of piece-wages is demanded, the implicit understanding 
is that it is such as will yield under normal conditions the ordi- 
nary weekly subsistence or standard wage. Since piece-wages 
are so firmly established in many trades that it is impracticable 
to demand their immediate abohtion, the actual struggle be- 
tween employees and employers is as to whether these piece- 
wages shall be allowed to fluctuate indefinitely, being dragged 
at the heels of the prices of commodities, or whether an absolute 
limit shall be set upon their fall. The employer says, 'When 
trade is good and prices and profits high, labour will share the 
prosperity in high rates of wage and large weekly earnings: so, 
when trade is bad and prices and profits low, labour must share 
this adversity and take low pay.' Organised labour replies, 
'No, there is no parity between the power of capital and of 



THE HUMAN CLAIMS OF LABOUR 197 

labour to bear depressions: capital is strong and can bear up 
against low profits without perishing, labour is weak and cannot 
bear up against low wages. We will only sell our labour-power 
on condition that a lower limit is set upon its price, such a limit 
as will enable the labourer to keep body and soul together, and 
to maintain that efficiency which constitutes his working capital. 
This minimum wage should be regarded as a fixed cost in your 
production. At present the prices of your goods oscillate with- 
out any assigned Hmit. You accept low contracts for work, and 
then adduce this low price as a reason for reducing wages. Let 
a minimum wage once be adopted in the trade, and contract 
prices cannot be accepted on so low a level. The minimum wage 
will thus help to steady selHng prices and to regulate employ- 
ment and output.' 

Both the economics and the social ethics of this labour con- 
tention are in substance sound. So long as the price of labour 
is left to higghng in a competitive market, there is nothing 
to prevent the wages falKng to the lowest level at which a 
sufficient number of workers can be induced to consent to 
work, and that level may involve a reduction of the standard 
of Hving in their families below the true subsistence point. 
The fixing of wages by so-called free competition affords no 
security for a family wage of efficiency or even of subsistence. 
There should be no mistake upon this essential matter. The 
doctrine of 'economy of high wages' has no such general effi- 
cacy as is sometimes suggested. Though in many cases high 
wages are essential to maintain and evoke the energy and effi- 
ciency required, in other cases they are not. From the standpoint 
of the immediate profits of employers 'sweating' often pays. But 
from the standpoint of society it never pays. 

Therefore, the policy of the organised workers, in seeking to 
enforce the doctrine of a minimum wage, is not only a policy of 
self-preservation for the working-classes but a salutary social 
policy. It is for this reason that the State intervenes in favour 
of the practice, establishing Trade Boards to enforce its applica- 
tion in so-called 'sweated trades', and acknowledges, in theory 
at any rate, its vaHdity in all public employments and public 
contracts. 



igS WORK AND WEALTH 

§ 5. Although this minimum wage is tolerably remote from 
the ideal of a fixed weekly salary in most trades, it is a true step 
in this direction. The most controverted item in trade-union 
policy, the Hmitation of individual output, is also partly actuated 
by the same motive. Few things make the ordinary business 
man more indignant than the trade-union regulations in certain 
trades which restrain stronger or quicker workers from putting 
forth their full productive energy. They denounce alike its 
dishonesty and its bad economy. It is based, they say, upon the 
'lump of labour' fallacy, the false notion that there exists an 
absolutely limited amount of employment, or work to be done, 
and that if the stronger or quicker men do more than their share, 
the others will go short. This refusal to allow each man to do 
his best, like the related refusal to get the full work out of new 
labour-saving machinery, appears monstrously perverse and 
wicked. But, though partly animated by short-sighted economic 
views, this policy is not entirely to be thus explained. The level- 
ling down of the output of all workers to a standard has partly 
for its object the estabhshment of greater evenness of income 
among the workers in a trade. At any given time in a given 
mill, or factory town, the actual amount of available employ- 
ment is limited, and for the time it is true that by limitation of 
individual output a larger number of workers are employed, and 
a larger number of working famihes are provided with a normal 
wage, than would have been the case if a certain number of men 
were encouraged to an unrestricted energy and unlimited over- 
time. In the long run, it may be better to encourage full indi- 
vidual liberty of output, even in the interest of the aggregate of 
employment, but the restraints to which I here allude become 
more intelligible when they are regarded as attempts to enforce 
a common class weekly wage by means of an even distribution of 
employment. 

A minimum piece-wage, based on a moderate computation of 
the weekly output per worker, and accompanied by a substantial 
security of full regular employment, would in effect place the 
piece-worker in the position of a salaried employee. But, of 
course, a minimum piece-wage, however high, does not go far 
to this end, unless security of tenure at fairly full employment is 



THE HUMAN CLAIMS OF LABOUR 199 

obtained. The problem of un- and under-employment and of 
irregular employment is now beginning to be recognised in its 
full social gravity. A weekly wage of bare efficiency with regular 
emplo3anent is socially far superior to a higher average wage 
accompanied by great irregularity of work. The former admits 
stability of modes of living and ready money payments: it con- 
duces to steadiness of character and provision for the future with- 
out anxiety. Rapid and considerable fluctuations of wages, even 
with full employment, are damaging to character and stabiHty 
of standards: but irregularity of employment is the most de- 
structive agency to the character, the standard of comfort, the 
health and sanity of wage-earners. The knowledge that he is 
Hable at any time, from commercial or natural causes that He 
entirely outside his control, to lose the opportunity to work and 
earn his Hvehhood, takes out of a man that confidence in the 
fundamental rationality of life which is essential to soundness 
of character. Religion, ethics, education, can have Httle hold 
upon workers exposed to such powerful illustrations of the un- 
reason and injustice of industry and of society. 

The regularisation of industry, so as to afford substantial 
guarantees of full regular employment, thus ranks with the 
minimum wage as the most substantial contribution towards the 
substitution of salary for wages, which the organic law of Dis- 
tribution requires. The State is begimiing to cooperate with 
the Labour Movement for the attainment of this social object, 
stimulating employers to organise their industries so as to furnish 
a more even volume of employment. 

§ 6. This interpretation of the Labour Movement as a half- 
conscious manifold endeavour to rescue the remuneration of 
Labour from the risks and defects of the competitive labour- 
market, and to estabHsh it on an economy of human needs, is 
not fully understood without some further reference to the action 
of organised society. The Labour Movement, in its endeavour 
to get a better distribution of the income, is not confined to 
trying to secure a satisfactory minimum or standard wage, 
fortified by greater security of work and personal insurance 
against unemployment. It seeks also to supplement its wages 
by cooperative and pubHc provisions. 



200 WORK AND WEALTH 

The cooperative movement is an attempt to convert into real 
wages some of the profits of employers and shareholders in manu- 
facturing and commercial businesses, so enlarging the proportion 
of the real income of the nation which goes to the remuneration 
of labour. But the growing attachment of the Labour Organisa- 
tions to politics is equally motived by the endeavour to secure 
from the State, not merely legal supports for higher wages and 
improved conditions of employment, but actual supplements to 
wages in the shape of contributions from the public services to 
their standard of living. Free education, old-age pensions, and 
public subsidies towards insurance are a direct contribution from 
the State to the higher standard of life which modern civilised 
society demands. Health, education, recreation, and provision 
against emergencies, are coming more and more to be recognised 
as proper objects of governmental action, and other important 
services, such as transport, credit, art, music and literature, are 
far on the way to becoming communal supplies. Although these 
modes of social provision may be chiefly motived by considera- 
tions of public health and other common goods, they neverthe- 
less must rank as contributions to the standard of comfort and 
well-being of the working-class families who are the special bene- 
ficiaries. ReHeving, as they do in many instances, the private in- 
comes of the workers from expenditure which otherwise the 
family would find it to its private interest to incur, these grow- 
ing pubhc services form a genuine and a considerable contribution 
to the available real income of the working-classes. So far as 
by taxation direct or indirect the cost of such public services 
can be considered a burden upon, or a deduction from the wage- 
income of the workers, it forms, of course, no net addition to 
their share, but is only a public control over methods of ex- 
penditure. But inasmuch as the distinct tendency of modern 
taxation is towards an increasing taxation of the incomes and 
property of the non-working classes, these public services rank 
as supplementary income, paid in kind, and tending to equalise 
the standard of living of individual workers and grades of workers. 
The criticism sometimes directed against this State socialism, 
upon the ground that it tends to weaken the force of wage- 
bargaining and transfers to the shoulders of ' society ' costs which 



THE HUMAN CLAIMS OF LABOUR 201 

employers would otherwise have to bear in the shape of higher 
money wages, would have considerable force, if the old laissez- 
faire principle of ' free contract ' were allowed otherwise to work 
unimpeded. But this, as we see, is not the case. The growing 
policy of minimum and standard rates, supported by pubHc 
opinion and, where necessary, by public law, and hardening 
into a poHcy of fixed salaries, is nowise inconsistent with a simul- 
taneous development of communal supplies of goods and services 
which usually he a little above the normal standard of comfort 
of those who are the chief beneficiaries. 

The growing pohtical activities of a labour movement which 
once eschewed State aids not merely attest the general growth of 
conscious democracy but imply a recognition of the direct con- 
tribution which the State is making towards a general distribu- 
tion of the national income in accordance with an economy of 
human needs. 



CHAPTER XIV 

SCIENTIFIC MANAGEMENT 

§ I. No humanist treatment of modern industry can ignore 
the recent advances of scientific methods into the regulation 
both of standards of production and standards of consumption. 
In both arts ahke the crude empiricism of the past is giving place 
to a more ordered, conscious rationaHsm. As is only natural, 
the advance of science is more rapid in the productive arts. 

In recent years many scattered attempts have been made to 
apply physiology and psychology to economic processes. Busi- 
ness men by scientific observation and experiment have brought 
criticism to bear upon the traditional and empirical modes of 
organising and conducting businesses. The more or less hand- 
to-mouth methods which were possible in small businesses where 
the manager was owner, and could keep a close personal super- 
vision of his employees and all their work, were found increasingly 
unsuitable to modern types of large capitalist business. It was 
necessary to devise regular methods for correlating the work of 
the different departments, and for enabling a single central pur- 
pose to operate by complex delegation through several grades of 
subordinate officials with automatic checks and registers. More 
accurate methods of book-keeping, especially of cost-taking, 
were devised; experiments were made in bonuses, profit-sharing, 
fines, pace-making and various modifications of the wage-systems 
applied to evoke more energy, skill, or care from the workers 
and officials; hours of labour and shift-systems were subjected 
to measured tests. Still more recently the detailed technology 
of manual and mental labour has been made material of physi- 
ological and psychological investigation, ^ientific Manage- 
ment has become a conscious art. Business colleges in America 
and Germany give courses of instruction in this art, and a new 
profession has arisen of expert advisers who are called in as 
specialists to diagnose the deficiencies or wastes of industrial or 

202 



SCIENTIFIC MANAGEMENT 203 

financial power in particular businesses and to prescribe reme- 
dies. 

Economic progress, regarded from the standpoint of the busi- 
ness man, consists in getting a given quantity of saleable goods 
turned out at a lower cost of production. That cost of production 
consists of the salaries and wages paid to various grades of em- 
ployees for mental and manual labour, cost of materials and 
power, standing expenses for maintenance of plant and premises, 
including replacement and insurance, and interest upon capital. 
Anything that reduces any one of these costs, without a cor- 
responding increase of another, is profitable from the standpoint 
of the individual employer, or of all employers in the trade, if it 
be generally adopted, or of the consuming public, if it wholly or 
partly goes to them in lower selling prices. Where the reduction 
of costs simply takes the shape of reduced wages for the same 
work, however, it causes no net increase of concrete wealth, but 
merely distributes the same amount (or less by reason of reduced 
efiiciency of labour) in a different manner. Such a reduction 
cannot then be regarded as economic progress, from the national 
standpoint. 

vBut every other reduction of cost carries with it prima facie 
evidence of a net increase of concrete wealth. Inventions of 
machinery, improved chemical or other treatment of materials, 
better business organisation and subdivision of labour, improved 
skill and energy in employees, better book-keeping, credit, 
marketing arrangements, — all such technical improvements 
promote the increase of concrete wealth. In all these ways 
many great advances have been made in various industries. But, 
alike in invention and in organisation, too much has been left 
to chance, or to the pressure of some emergency, too Httle is the 
result of ordered thought. V^Business has been conducted too 
much in the spirit of an art, too Httle in that of appHed science. 
The modern tendency is to introduce the exacter methods of 
science. The modern large manufacturing or mining enterprise 
employs expert engineers and chemists, not only to test and 
control the operation of existing processes, but to invent new 
and cheaper ways of carrying out a process, to discover new pro- 
ducts and new uses for by-products. It employs expert account- 



204 WORK AND WEALTH 

ants to overhaul its book-keeping and finance and to suggest 
improvements. Initiative and economy are to be studied, evoked 
and applied along every path. 

§ 2. But until lately the detailed organisation of labour and 
its utilisation for particular technical processes had received 
little attention in the great routine industries. Even such tech- 
nical instruction as has been given to beginners in such trades 
as building, engineering, weaving, shoemaking, etc., has usually 
taken for granted the existing tools, the accepted methods of 
using them and the material to which they are applied. To make 
each sort of job the subject-matter of a close analysis and of 
elaborate experiment, so as to ascertain how it could be done 
most quickly and accurately and with the least expenditure of 
needless energy, comes as a novel contribution of business enter- 
prise. To get the right man to use the right tools in the right 
way is a fair account of the object of Scientific Management. 
At present a man enters a particular trade partly by uninstructed 
choice, partly by chance, seldom because he is known by him- 
self and his employer to have a natural or acquired aptitude for 
it. He handles the tools that are traditional and are in general 
use, copying the ways in which others use them, receiving chance 
tips or suggestions from a comrade or a foreman, and learning 
from personal experience how to do the particular work in a way 
which appears to be least troublesome, dangerous, or exhausting. 
Both mode of work and pace are those of prevailing usage, more 
or less affected by machinery or other technical conditions. 
The scientific manager discovers enormous wastes in this way 
^f working. Part of the waste he finds due to improper tools and 
improper modes of working, arising from mere ignorance; part he 
attributes to systematic or habitual slacking, more or less con- 
scious and intentional on the part of the workers. The natural 
disposition of the worker to "take it easy" is supplemented by a 
beHef that by working too hard he deprives some other worker 
of a job. Scientific Management, therefore, sets itself to work 
out by experiment the exact tool or machine appropriate to 
each action, the most economical and effective way by which a 
worker can work the tool or machine, and the best method of 
selecting workers for each job and of stimulating them to perform 



SCIENTIFIC MANAGEMENT 205 

each action with the greatest accuracy and celerity. By means 
of strictly quantitative tests it works out standard tools, standard 
methods of work and standard tests for the selection, organisa- 
tion, stimulation, and supervision of the workman. 

In his exposition of this economy ^ Mr. Taylor takes as his 
simplest illustration of choice of tools the 'art' of shovelling. 
Left to himself, or working with a gang, the shoveller will use 
a shovel whose weight, size, and shape have never been considered 
in relation to the particular material it has to move or the sort of 
man who has to use it. ' By first selecting two or three first-class^ 
shovellers, and paying them extra wages for doing trustworthy 
work, and then gradually var3dng the shovel load and having all 
the conditions accompanying the work carefully observed for 
several weeks by men who were accustomed to experimenting, 
it was found that a first-class man would do the biggest day's 
work with a shovel load of about 21 pounds.' - As a result of this 
discovery, instead of allowing each shoveller to choose his own 
shovel, the company provided eight or ten different kinds of 
shovels accommodated to the weight of different materials and to 
other special conditions. Again, thousands of stop-watch obser- 
vations were made to discover how quickly a labourer, provided 
with his proper shovel, could push the shovel into the materials 
and draw it out properly loaded. A similar study was made of 
* the time required to swing the shovel backward and then throw 
the load for a given horizontal distance, accompanied by a 
given height. ' With the knowledge thus obtained it was possible 
for the man directing shovellers, first to teach them the exact 
method of using their strength to the best advantage, and then 
to assign the daily task by which they could earn the bonus paid 
for the successful performance of this task. For, though the 
skilled director can prescribe the right tool and the right method, 
he cannot get the required result without the willing cooperation 
of the individual worker. For this purpose a bonus is applied, 
the size of which is itself a subject of scientific experiment. The 
relation of this bonus to the ordinary day or piece wage will vary 
with the various t3^es of work and workers. In the Bethlehem 

1 The Principles of Scientific Management (Harper & Bros.). 

2 Op. cit., p. 65. 



2o6 WORK AND WEALTH 

Steel Works it was found that the best effect in stimulating energy 
was got by a bonus of about 60 per cent, beyond the wages 
usually paid. 'This increase in wages tends to make them not 
only thrifty but better men in every way; they live rather better, 
begin to save money, become more sober, and work more steadily. 
When, on the other hand, they receive much more than a 60 
per cent increase of wages, many of them will work irregularly 
and tend to become more or less shiftless, extravagant, and dis- 
sipated. Our experiments showed, in other words, that it does 
not do for most men to get rich too fast.' ^ 

Considering that it was claimed that the result of this new 
plan of work was to raise the average daily output per man from / 
16 to 59 tons, and to secure an annual saving in the labour-bill V 
amounting to between $75,000 and $80,000, it would have been 
interesting to follow the effects of a rapid advance of wealth 
upon the dividend-receivers who gained so disproportionate a 
share of the advantages of the new economy. 

§ 3. So far as the selection and adaptation of tools to the 
special conditions of the work are concerned, there exists no 
opposition between the business and the human economy. If a 
shoveller can shovel more material without greater exertion by 
using a particular shovel, the system which ensures his using this / 
shovel is beneficial to everybody, assuming that he gets sonW 
share of the value of the increased output. When we turn from 
a simple tool to more elaborate machinery, it becomes evident 
that quantitative testing is capable of achieving enormous 
technical economies. Mr. Taylor describes the gains in the out- 
put of metal-cutting machines made by means of such economies. 
' Its pulling power at the various speeds, its feeding capacity, and 
its proper speeds were determined by means of the slide-rules, 
and changes were then made in the countershaft and driving 
pulleys so as to run it to its proper speed. Tools, made of high- 
speed steel and of the proper shapes, were properly dressed, 
treated and ground. A large special slide-rule was then made, 
by means of which the exact speeds and feeds were indicated at 
which each kind of work could be done in the shortest possible 
time in tJhis particular lathe. After preparing in this way so 
1 The Principles of Scientific Majiagement, p. 74. 



SCIENTIFIC MANAGEMENT 207 

that the workman should work according to the new method, 
one after another, pieces of work were finished in the lathe, cor- 
responding to the work which had been done in our preliminary- 
trials, and the gain in time made through running the machine 
according to scientific principles ranged from two and one-half 
times the speed in the slowest instance to nine times the speed in 
the highest'.^ 

This illustration, however, makes it evident that when we 
pass from technical improvements of tools to improved methods y 
of working, we open possibilities of opposition between the busi- 
ness and the human interest. An improvement in the shape or 
contour of the * cutting edge ' for a particular material is an un- 
qualified gain. So is a discovery as to the ways in which hard- 
ness or softness of metals affects the cutting rate. But when it is 
a question of evoking from the workman a higher pace of move- 
ment to meet the requirements of the speeded-up machine, no 
such consistency of interests can be assumed. The fact that by 
selection, instruction, and minute supervision, workmen can 
be got to work successfully at the higher speed, and regard them- 
selves as sufficiently compensated by a bonus of 35 per cent, 
does not settle the question of human values. So far as the 
selective process simply chooses the men most easily capable of 
working at a higher speed and of eliminating those who could 
not easily or possibly adapt themselves to it, no net increase of 
human cost is involved. But so far as the bonus and the 'ath- 
letic' spirit which it is used to evoke,^ induce workmen to give 
out an amount of muscular or nervous energy injurious to them 
in the long run, the human cost may greatly outweigh both the 
social value of the increased output and the utility to them of 
higher wages. How crucial is this question of speeding-up the 
human labour is well illustrated by the experiments in bricklay- 
ing, by means of which the bricklayers engaged on straight work, 
were raised from an average of 120 bricks per man per hour to 

^ The Principles of Scientific Management, p. 100. 

2 ' While one who is not experienced at making his men really enthusiastic in 
their work cannot appreciate how athletic contests will interest the men, it is the real 
secret of the success of our best superintendents. It not only reduces costs, but it 
makes for organisation and thus saves foremen's time.' F. G. Gilbreth, Bricklaying 
System, p. 13. 



2o8 WORK AND WEALTH 

350. By alterations of apparatus Mr. Gilbreth dispenses with 
certain movements which bricklayers formerly considered neces- 
sary, while saving time in the actual process of la3dng by using 
both hands at the same time, bricks being picked up with the 
left hand at the same instant that a trowel of mortar is seized 
with the right. 

'It is highly likely that many times during all of these years individual 
bricklayers have recognised the possibiUty of eliminating each of these 
unnecessary motions. But even if, in the past, he did invent each one of 
Mr. Gilbreth's improvements, -no bricklayer could alone increase his speed 
through their adoption, because it wiU be remembered that in all cases 
several bricklayers work together in a row and that the walls all around a 
building must grow at the same rate of speed. No one bricklayer, then, 
can work much faster than the one next to him. Nor has any workman the 
authority to make other men cooperate with him to do faster work. It is 
only through enforced standardisation of methods, enforced adoption of the 
best implements and working conditions, and enforced cooperation that 
this faster work can be assured. And the duty of enforcing the adoption 
of standards and of enforcing this cooperation rests with the management 
alone. The management must supply continually one or more teachers to 
show each new man the new and simpler motions, and the slower men must 
be constantly watched and helped untU they have risen to their proper 
speed. All of those who, after teaching, either will not or cannot work in 
accordance with the new methods and at the higher speed, must be dis- 
charged by the management. The management must also recognise the 
broad fact that workmen will not submit to this more rigid standardisation 
and will not work extra hard, unless they receive extra pay for doing it. '^ 

This makes it clear that, though part of the larger output, or 
increased speed, is got by improved arrangements or methods of 
work that need not tax the workers' powers, part of it does in- 
volve their working "extra hard." Not only a better direction 
but a larger amount of energy is required of them, with an in- 
crease of wear and tear and of fatigue. It is an unsettled point 
of great importance, how much of the enlarged output can be 
imputed to the former, how much to the latter. Even more im- 
portant is the allusion in the passage Just quoted to 'the rigid 
standardisation' to which workmen will not submit, unless they 
are well paid to do so. For this rigid standardisation of the work 
involves a corresponding mechanisation of the workmen. Men 
who formerly exercised a .certain amount of personal choice in the 
details of their work, as regards action and time, must abandon 

^ The Principles of Scientific Management, p. 83. 



SCIENTIFIC MANAGEMENT 209 

this freedom and follow exactly the movements prescribed to 
them by the taskmaster with a chart and a stop-watch. He 
will prescribe the particular task for each, the tool he shall use, 
the way he shall use it, the intervals of work and rest, and will 
take close note of every failure to conform. The liberty, initia- 
tive, judgment, and responsibility of the individual workman are 
reduced to a minimum. 

This is admitted by the advocates of Scientific Management, 
though in a qualified manner. One of the elements of success is 
said to be: 'An almost equal division of the work and responsi- 
bihty between the workman and the management. All day long 
the management work almost side by side with the men, helping, 
encouraging and smoothing the way for them, while in the past 
they stood on one side, gave the men but httle help, and threw 
on to them the entire responsibility as to methods, implements, 
speed, and harmonious cooperation.'^ But in the broader dis- 
cussion of the difference between the ordinary business method 
and Scientific Management, in relation to the numerous little 
problems that arise in every kind of work, we are told that, 
'the underlying philosophy of this (ordinary) management nec- 
essarily leaves the solution of all these problems in the hands of 
each individual workman, while the philosophy of Scientific 
Management places their solution in the hands of the manage- 
ment.'^ Elsewhere ^ it is stated that Scientific Management 
'involves the estabhshment of many rules, laws, and formulee 
which replace the judgment of the individual workman.' 

§ 4. Now in endeavouring to apply to this poHcy of Scientific 
Management a standard of human welfare, we are confronted by 
three questions: — 

(i) What is the effect of this policy upon the human costs of 
labour? 

(2) How far will any increase of human costs of labour be 

offset by the greater human utility of the higher wages 
they receive? 

(3) How far is any balance of human costs, which is imposed 

on special classes of producers, compensated by the in- 
creased wealth at the disposal of society at large? 
^ Taylor, p. 85. ^Op. cit., p. 103. ^ Op. cit., p. 37. 



2IO WORK AND WEALTH 

There is some tendency among the advocates of Scientific 
Management to burke a full discussion of these issues by as- 
serting that their policy is only a fuller and more rational appli- 
cation of that principle of division of labour which is by general 
consent the economic foundation of modern civilised society. 
If some sacrifice of individual freedom in industrial work is in- 
volved, it is assumed to be more than compensated by gains to 
society in which every individual, as a member of society, has 
his proper share. 

But we cannot consent thus to rush the issue. For it may 
turn out that the new method, though but a stricter and finer 
application of the old, carries this economy so far that the in- 
creased human costs imposed upon the producer grow faster 
than the human gains which the increased productivity confers 
either upon him or upon society at large. In other words, the 
human indictment brought by the mid-Victorian humanists 
against the factory system of their day and rejected on a general 
survey of the economic situation, might be validated by the 
increased standardisation and specialisation of labour under 
scientific management. For though the division of labour under 
modern capitalism in all its branches has narrowed the range of 
productive activity for the great bulk of workers, a survey of 
those activities shows that within their narrowing range there 
may and does survive a certain scope for skill, judgment, and 
initiative, a certain limited amount of Kberty in detailed modes 
of workmanship. Moreover, the conditions of most organised 
work form a certain education in disciphne and responsibility. 
It is only a small proportion of the workers who are converted 
into mere servants of the machine. Though large classes are 
engaged in monotonous routine, the paces and the detailed 
movements are not rigidly enforced upon them. Different work- 
men will be doing the same work in a slightly different way. 

Now the standardisation under the new method is expressly 
designed so as to extirpate these Httle personal equations of 
liberty and to reduce the labour of the ordinary employee to an 
automatic perfection of routine. It is, indeed, contended by 
Mr. Taylor that the knowledge of each man that he is working 
at his highest personal efficiency will be a satisfaction to him, 



SCIENTIFIC MANAGEMENT 211 

that the attention he must pay to the detailed orders of the task- 
master will evoke intelligence and responsibility, and that his 
initiative in the way of suggesting improvements, which has 
hitherto been prized as an element of liberty and a source of 
industrial progress, can be conserved under scientific manage- 
ment. But a careful examination of the illustrations of the 
method compels our rejection of these claims. The knowledge 
of a routine worker that he is speeded up to his highest pitch by 
a method whose efficiency is prescribed by others, does not yield 
a sense of personal efficiency. Mere m^eticulous obedience is not 
a proper training in the disciphne of a 'person', and a workman 
operating under these conditions will not have the practical 
liberty for those little experiments in trial and error on his own 
account which makes his suggestions of improvement fruitful. 
Mr. Taylor, however, carries his defence so far as to deny all 
narrowing effects of subdivision of labour on the worker. Ad- 
mitting that the workmen frequently say when they first come 
under the system, 'Why, I am not allowed to think or move 
without someone interfering or doing it for me,' he seems to 
think the following answer satisfactory: — 

'The same criticism and objection, however, can be raised against any 
other modern sub-division of labour. It does not follow, for example, that 
the modern surgeon is any more narrow or wooden a man than the early 
settler in this country. The frontiersman, however, had to be not only a 
surgeon, but also an architect, house-builder, lumber-man, farmer, soldier, 
and doctor, and he had to settle his lawsuits with a gun. You would hardly 
say that the Hfe of the modern surgeon is any more narrowing or that he is 
more of a wooden man than the frontiersman. The many problems to be 
met and solved by the surgeon are just as intricate and difficult and as 
developing and broadening in their way as were those of the frontiersman.' 1 

Now as to this we can only reply, first that it is untrue that 
the surgeon's hfe on its productive side (the issue under discus- 
sion) is as broad and as varied as that of the frontiersman. In the 
second place, even if we accepted the view that a narrow field of 
activity admitted of as much variety and interest as a wider 
field, provided liberty of action were equal in the two, that view 
is quite inappKcable to the case at issue. For there all liberty 
of action in the subdivided field of labour is excluded. 

1 Taylor, p. 126. 



212 WORK AND WEALTH 

§ 5. So far, then, as initiative, interest, variation, experiment, 
and personal responsibility are factors of human value, qualify- / 
ing the human costs of labour, it seems evident that Scientificv 
Management involves a loss or injury to the workers. Are there, 
however, any personal considerations, apart from wages, that 
may be taken as an offset? Suppose that workers can be found 
of a dully docile character with a large supply of brute muscular 
energy, will any harm be done them by utilising them to carry 
pig-iron or to shovel earth under "scientific" supervision? Mr. 
Taylor has an interesting passage bearing on this question: 
'Now one of the very first requirements for a man who is fit to 
handle pig-iron as a regular occupation is that he shall be so 
stupid and so phlegmatic that he more nearly resembles in his 
mental make-up the ox than any other type.' ^ These ox-like 
men, it may be held, do not really suffer any injury, undergo any 
human cost, by having no opportunity furnished them for exer- 
cising faculties and activities of mind which they do not possess 
and are unlikely to acquire. If then, in every grade of workers, 
there are to be found enough men who appear destined by nature 
for a rigidly mechanical task conducted under servile conditions, 
it may be thoroughly sound social economy to put them to per- 
form all labour of such kind as is required for the supply of human 
needs. 

This is a problem of appKed psychology, or of psycho-physi- 
ology. Professor Miinsterberg, in a recent volume,^ makes a 
contribution towards its solution, and towards a finer art of 
Scientific Management than that which has been evolved by 
business men. For since all industry primarily involves the 
voluntary ordered application of human faculties to manual 
and mental actions, the psychologist must be in a position to 
give important advice in all economic operations. For he alone 
is qualified by scientific tests to discover and estimate the various 
mental capacities which count for success in industry, to ascer- 
tain how they cooperate and conflict, and how they may be best 
applied to the performance of the various operations in each pro- 
cess. Attention, memory, ideas, imagination, feeling, volition, 
suggestibility, ability to learn, ability to discriminate, judgment, 
'■ Taylor, p. 59. ^ Psychology and Industrial Efficiency. 



SCIENTIFIC MANAGEMENT 213 

space-sense, time-sense, and other mental qualities, enter in 
varying measures as factors of industrial ability. Economic 
psychology may, it is contended, increase the efficiency of in- 
dustry in three ways. 

'We ask how we can find the men whose mental qualities make them best 
fitted for the work they have to do; secondly, under what psychological 
conditions we can secure the greatest and most satisfactory output of work 
from every man; and finally, how we can produce most completely the in- 
fluences on human minds which are desired in the interests of business. 

In other words, we ask how to find the best possible man, how to produce 
the best possible work, and how to secure the best possible effects.' ^ 

The first of these services, fitting the man to the job, involves 
a double psychological enquiry, first into the vocational needs, 
and secondly into the personal ability of each applicant to 
meet these needs. We must examine the task to learn what 
combination of mental qualities in the employee is required to 
do it well, and we must examine each applicant for such work to 
learn whether he possesses the requisite qualities. 

Two illustrations will serve to indicate what is meant. The 
problem of selecting fit motor-men for electric railways was 
brought to Professor Miinsterberg's attention. To drive fast 
and at the same time avoid accidents were the requirements of 
the companies. Fitness for this purpose he found to centre in 
a single mental process: — 

' I found this to be a particular complicated act of attention by which the 
manifoldness of objects, the pedestrians, the carriages, and the automobiles, 
are continuously observed with reference to their rapidity and direction in 
the quickly-changing panorama of the streets. Moving figures come from 
the right and from the left towards and across the track, and are embedded 
in a stream of men and vehicles which moves parallel to the track. In the 
face of such manifoldness there are men whose impulses are almost inhibited 
and who instinctively desire to wait for the movement of the nearest objects; 
they would evidently be unfit for service, as they would drive the electric 
car far too slowly. There are others who, even with the car at full speed, 
can adjust themselves for a time to the complex moving situation, but 
whose attention soon lapses, and while they are fixating a rather distant 
carriage, may overlook a pedestrian who carelessly crosses the track im- 
mediately in front of this car. In short, we have a great variety of mental 
types of this characteristic unified variety, which may be understood as a 
particular combination of attention and imagination. ' 2 

^Op. cit.,p. 23. *0p. cit.,p. 66. 



214 WORK AND WEALTH 

An apparatus was devised, representing the psychological 
conditions involved in the actual problem, not a mere miniature, 
but an adaptation which should call out and test the same mental 
qualities. A number of actual motor-men were then carefully 
examined in the worldng of this apparatus so as to test the 
amounts of speed and accuracy and the relation between the 
two. Quantitative estimates were thus reached of fitness in 
working the apparatus, values being assigned respectively to 
speed and accuracy. In this way a psychological standard of 
fitness was attained, such as would be available for selecting 
applicants for the motor service. So in ship-service, where 
everything may turn upon prompt and accurate handHng of a 
sudden complicated emergency. Ship ofiicers are found whom 
a sudden danger paralyses, or keeps vacillating until it is too 
late. Others, feeling only the urgency of prompt action, jump 
to a too hasty decision. The desirable type is ' the men who in 
the unexpected situation quickly review the totahty of the 
factors in their relative importance and with almost instinctive 
certainty immediately come to the same decision to which they 
would have arrived after great thought.' ^ Here again it was 
possible to conduct a series of experiments, testing the mental 
processes and measuring the degrees of rapidity, correctness, 
and constancy. 

Other tests can be applied for the quahties desirable in such 
work as the telephone service, in which memory, attention, 
intelligence, exactitude, and rapidity are involved. Sometimes 
the mental qualities can be separately tested, sometimes their 
inter-relation is such as to require a simultaneous testing. 

§ 6. It is equally obvious that a good deal can be done to 
increase the productive efficiency of those who have been se- 
lected for any work, by methods of teacliing that involve psy- 
chological guidance. In learning such processes as typewriting 
and telegraphy, for instance, much can be achieved by technical 
adjustments of movement such as we have already described, 
and by considered adaptations of machine and materials to 
suit human faculties. But methods of improving memory and 
securing a more regular and accurate attention, of increasing 

^ Op. cit., p. 85. 



SCIENTIFIC MANAGEMENT 215 

the rapidity of repeated actions with the least nervous wear 
and tear, of educating dehcacy of touch and sight for specific 
purposes, the utiUsation of rhythmic tendencies, the proper 
balance of intervals of work and rest, the influence of imitation 
and social cooperation in gang labour, and finally the effects of 
different quantities and modes of remuneration in evoking and 
maintaining the various factors of efficiency — all such considera- 
tions offer a fruitful field for psychological investigation. 

Hence psychology, it is urged, can contribute greatly to pro- 
ductivity by finding the best man for each Job and adjusting 
his mental equipment to conditions of work Vv^hich in their turn 
can be modified to fit his powers. But, regarding production as 
designed to satisfy human demands, psychology can be utilised 
also to assist in getting the right quantities and quahties of 
goods to the right persons. Commercial organisation exists for 
this purpose. It does study the wants and demands of con- 
sumers. But it might do so with more 'science'. Professor 
Miinsterberg makes an exceedingly interesting study of the arts 
of advertising and of selling over the counter, to illustrate how 
much might be done by substituting experimental laws for in- 
stinctive and traditional practices. One comment upon this 
application of his science, however, is called for. Though the 
social-economic view would oblige the psychologist to approach 
the subject specifically from the standpoint of the consumer 
and the psychology of satisfactions in his standard of comfort, 
Professor Miinsterberg virtually confines himself to the psy- 
chology of commerce and of marketing regarded from the stand- 
point of the manufacturer or merchant. 

^Thus psychology can be made to devise and prescribe econo- 
mies of human power in industry, which, like the technical im- 
provements of Scientific Management, would seem to increase 
greatly the productivity of industry, turning out larger quanti- 
ties, and perhaps better qualities, of goods, with the same amount 
of labour. 

§ 7. What would be the human valuation of these processes 
of scientific economy? Assuming that this economy fructifies 
in an enlarging volume of wealth, it would appear to be accom- 
panied by an increase of welfare, unless the human costs of labour 



2i6 WORK AND WEALTH 

were correspondingly increased, or the distribution of the larger 
volume of wealth were made so much more unequal that it fur- 
nished a smaller volume of utility in its consumption. Neither 
of these quahfications is, indeed, excluded by the terms of the 
economy. For each stroke of Scientific Management is pri- 
marily justified as a profit-making device, advantageous to the 
capitalist-employer in a particular business. It enables him to 
turn out goods at a lower labour-cost and so to make a larger 
margin of profit on their sale. If we suppose this economy to 
be of wide or general adoption, it would be equivalent to an all- 
round increase in the technical efficiency of labour. Unless we 
suppose the aggregate quantity of production to be a fixed 
quantity (a supposition not in accordance with experience), it 
would seem to follow that at least as large a quantity of this 
more efficient labour would be employed in turning out an in- 
creased volume of goods. In that event, it would be possible 
that the workers, as well as the capitalist employers, should enjoy 
a higher rate of remuneration. Whether they would do so, 
however, and to what extent, seems quite uncertain. For though 
the payment of a considerable bonus in addition to current wages 
was necessary in the experiments described by Mr. Taylor, in 
order to evoke from a particular group of workers submission to 
the new terms of work, it does not follow that, once adopted by 
all employers in the trade, the method would entail or even 
permit a continuance of this higher pay. For the pioneer firm 
admittedly pays the bonus partly in order to overcome the pains 
and scruples of workers subjected to a speeding-up system. If 
it did not pay a bonus, the workers would quit this employment 
for some other that was open to them. But if no other employ- 
ment upon the old terms were open, this part of the bonus^might 
be unnecessary as an inducement. Even that part of the bonus 
which seems to be directed to stimulate the ambition and energy 
of the individual worker, and to break up the habitual slackness 
of the group and its regulation stroke, would seem to stand on a 
precarious footing, when the new method of work was once well 
established and itself became a habit. Only that part, if any, 
of the bonus, or higher wage, which was necessary to replace the 
greater muscular or nervous wear and tear of the speeded-up 



SCIENTIFIC MANAGEMENT 217 

and more automatic work, would necessarily survive. It would 
stand as a necessary cost of production. If, however, as Mr, 
Taylor and Professor Miinsterberg appear to hold, the scientific 
management need entail no such additional wear and tear, there 
seems no ground for holding that, after the method became 
general, any bonus to the workers would be necessary. And if 
it were unnecessary, it would not, indeed under competitive 
terms could not, be paid. On this h^-pothesis, the additional 
wealth created by the improved efficiency of the system might 
go entirely to capital. Indeed, so far as the determination were 
left to individual bargaining, this result would appear almost 
inevitable. For the greater average efficiency of labour would be 
equivalent to a larger supply of labour (though it might also 
mean a better quality) , and since no immediate or corresponding 
increase of demand for labour need accrue, the price per unit of 
labour would fall. This would mean that the labourer would 
get no higher payment for his higher productivity. Even if the 
increasing rate and amount of profits brought increased saving 
and larger masses of competing capital, it would still seem doubt- 
ful whether the aggregate demand for labour would be found to 
keep pace with the growth of the supply which scientific manage- 
ment plus psychological selection would yield. 

Though, therefore, the aggregate product increased, it remains 
doubtful whether any considerable share of the increase must or 
would go to labour. But suppose that organisation of labour or 
social intervention were able to secure some considerable rise 
of real wages from the enlarged product, so that as consumers the 
workers were better off, the human value of the process is not 
yet established. Two related questions still remain for settle- 
ment, y First, that already tentatively raised, the question 
whether the workers may not suffer more from increased human 
costs of production under the new scientific regime than they 
gain in human utilities of consumption. Some of the 'science' 
in its appHcation would indeed appear to be wholly beneficial. 
The improved methods of selecting and of training labour, so as 
to get the best man for each job, and to enable him to do his work 
in the best way, is pure gain, provided that best way does not 
unduly strain his energy or dull his mind. Other elements of 



2i8 WORK AND WEALTH 

applied psychology are more doubtful in their net effect. The 
practices of scientific advertising and of suggestive selling have 
very little proved utility and are nearly as Ukely to be apphed 
to force the wrong articles on the wrong purchasers as to distrib- 
ute wealth along the lines of its maximum utiUty for consump- 
tion. The persons engaged for a livelihood in palming off goods 
on a public irrespective of any intrinsic merits they contain, pay 
a heavy toll in character for the work they are called upon 
to do. 

§ 8. But, turning to the main problem, there remains the issue 
of the increased mechanisation, or standardisation, of the worker 
under Scientific Management. Admitting that a certain amount 
of subdivision of labour, and of diminishing variety, interest and 
initiative, accruing therefrom, is justified in a human sense by 
the benefits of enhanced production, is there any Hmit to tliis 
economy, and if there be, is that Umit transgressed under Scien- 
tific Management? The question does not admit perhaps of 
any general or certain answer. Suppose it be admitted, as I 
think it must, that every appKcation of this Scientific Manage- 
ment does squeeze out of the labour-day some human interest, 
some call upon initiative, reason, judgment, responsibihty, 
surviving under previous conditions even in the most routine 
and subdivided toil, must we necessarily regard this loss as a 
heavy increased human cost of labour? Surely it depends upon 
the particular labour in question. In some, perhaps most, 
branches of heavy routine toil, the shreds of human interest, 
the calls on personality, are usually so trifling that it seems 
absurd to take them into much account. The work of carrying 
pig-iron, or of shovelling continually the same material, con- 
tains so little scope for the play of initiative, responsibility, etc., 
that any such regimentation as is described can hardly be said 
to damage the quahty of the work or the character of the worker 
as affected by his work. If a higher efficiency and a larger out- 
put can enable a smaller number of workmen to be kept on labour 
of so low a grade, there ought to be a net social gain. But there 
is another compensation possible for any loss of liberty, or in- 
crease of monotony, involved in Scientific Management. If it 
be accompanied by a shortening of the hours of labour, the 



SCIENTIFIC MANAGEMENT 219 

damage inflicted by the rigour of mechanical discipline may be 
compensated by a larger leisure. This compensation, of course, 
is reduced or even nullified, if the greater intensity of labour in 
the shorter day takes more out of the man, as often happens, 
than was taken out before. But, assuming that this is not the 
case, and that for a longer dull routine work-day is substituted 
a shorter but even more mechanical day, a net gain for labour is 
still possible. I am disposed to hold that a good case might be 
made out for Scientific Management as regards those orders of 
routine labour which, as ordinarily carried on, contain very 
little interest or humanity. Even then, however, there is a 
danger that deserves attention. If this regimentation can re- 
duce the cost per unit of dull, heavy muscular toil, as is likely, 
it may prevent the discovery and application of wholly mechan- 
ical substitutes for this work. 

But the human economy is far more doubtful in the case of 
labour which, though subdivided and mainly of a routine char- 
acter, still contains a margin for the display of skill, initiative 
and Judgment. To remove these qualities altogether from such 
work and to vest them, as is proposed, not even in the over- 
seers, but in a little clique of scientific experts, would mean the 
conversion of large bodies of skilled, intelligent workers into 
automatic drudges. The life and character of these men would 
suffer as an inevitable reaction of this drudgery, and it is doubt- 
ful whether a somewhat shortened work-day and somewhat 
higher wages would compensate such damage. While we may 
recognise the general desirability of division and specialisation 
of labour, some detailed Hberty and flexibihty should be left to the 
worker. 

§ 9. Indeed, were the full rigour of Scientific Management to 
be appKed throughout the staple industries, not only would the 
human costs of labour appear to be enhanced, but progress in 
the industrial arts itself would probably be damaged. For the 
whole strain of progress would be thrown upon the Scientific 
Management and the consulting psychologist. The large assist- 
ance given to technical invention by the observation and ex- 
periments of intelligent workmen, the constant flow of sug- 
gestion for detailed improvements, would cease. The elements 



220 WORK AND WEALTH 

of creative work still surviving in most routine labour would 
disappear. On the one hand, there would be small bodies of 
efficient taskmasters carefully administering the orders of expert 
managers, on the other, large masses of physically efficient but 
mentally inert executive machines. Though the productivity 
of existing industrial processes might be greatly increased by 
this economy, the future of industrial progress might be im- 
perilled. For not only would the arts of invention and improve- 
ment be confined to the few, but the mechanisation of the great 
mass of workmen would render them less capable of adapting 
their labour to any other method than that to which they had 
been drilled. Again, such automatism in the workers would react 
injuriously upon their character as consumers, damaging their 
capacity to get full human gain out of any higher remuneration 
that they might obtain. It would also injure them as citizens, 
disabling them from taking an intelhgent part in the arts of 
political self-government. For industrial servitude is inimical 
to political liberty. It would become even more difficult than 
now for a majority of men, accustomed in their work-day to 
mechanical obedience, to stand up in their capacity of citizens 
against their industrial rulers when, as often happens upon 
critical occasions, poUtical interests correspond with economic 
cleavages. 

I would not dogmatise upon the necessity of these human 
disadvantages of Scientific Management. The more rigorous 
routine of the work-day might be adequately compensated by 
shorter hours, higher wages, increased opportunities for educa- 
tion, recreation, and home Kfe. But there can be no security 
for adequate compensations of these orders under a scientific 
management directed primarily by private profit-making motives. 
For there is no guarantee that the larger profits to a business 
firm do not entail a damage to its employees, not offset by the 
bonus which they may obtain. Nor have we the required se- 
curity that any social gain in the way of increased product and 
lower prices may not be cancelled by the human injury inflicted 
upon large bodies of workers and citizens by the more mechan- 
ical and servile conditions of their labour. 



SCIENTIFIC MANAGEMENT 221 

§ 10. A little reflection will make it clear that the complete 
success of such a business economy would involve a correspond- 
ing ' science ' on the side of consumption. The standardised 
worker ought also to be a standardised consumer. For the reg- 
ular reliable conformity of work must involve a similar con- 
formity in diet and in other habits of life. If the 'scientific 
manager' were the full owner of his workmen, it would evidently 
be a function of his science to work out experimentally, with the 
assistance of the bio-psychologist, the cheapest and best way of 
living for each particular trade and type of worker. He would 
discover and prescribe the precise combination of foods, the most 
hygienic clothing and housing, the most appropriate recreations 
and the 'best books' for each class, with a view to the produc- 
tive efiiciency of its members. He would encourage by bonuses 
eugenic, and discourage by fines dysgenesic marriages among his 
employees. So far as intelHgent employers are in a position to 
determine or to influence the expenditure of the wages they pay 
and the general conduct of the hves of their employees outside 
the working hours, they are disposed to practice this policy. 
Where they are the owners of the town or village in which the 
workers find it most convenient to Hve, they can often do so with 
considerable effect. Philanthropic motives are often combined 
with business motives, and the combination may often be 
genuinely conducive to the human welfare of the community. 
Temperance, sanitation, and hygiene, educational and recreative 
opportunities may be made available. Certain regulations, 
chiefly of a prohibitory nature, regarding the use of alcohol, 
betting, or marriage, are imposed by some employers as con- 
ditions of employment. Such interferences outside the hours 
of labour are, however, exceptional and are generally justified 
on special grounds of economic safety and efficiency. 

§ II. But an altogether wider issue is opened up in the claims, 
not of the particular employer but of industrial society to im- 
pose or evoke standards of consumption scientifically adjusted 
to the various grades of industrial efficiency. If we regard a 
nation as an economic society, putting out productive energy in 
wealth-creation, it becomes evident that science has much to 
say, and can have more, regarding the expenditure of incomes 



222 WORK AND WEALTH 

and the consequent consumption of wealth. The science of 
scientific management, with all its psycho-physical apparatus 
for measuring results, can be applied to standards of living for 
individuals and families. The beginnings of this idea are found 
in the distinction which figured so largely in the classical Political 
Economy between productive and unproductive consumption. 
The discussions of Arthur Young, Eden and others, regarding 
the respective merits of wheat and oatmeal, beer and tea, as 
ingredients of working-class diet, were directed avowedly by 
this conception of economy. A good food was one that yielded 
more muscular energy or endurance per penny of expenditure. 
The more enhghtened doctrine known as 'the economy of high 
wages' was early recomended by philanthropists like Robert 
Owen, or business men like Mr. Brassey, on the score of experi- 
ments relating to the larger output of labour-power which higher 
wages with better feeding rendered possible. But there was 
no 'science' worth mention in these crude experiments. Only 
within recent years, with the advance of organic chemistry and 
physiology, has the 'science' of dietetics begun to emerge, 
analysing the various foods and assigning them their values as 
producers of tissue and of energy. We are now told the quanti- 
ties of proteids, carbohydrates and fats contained in various 
foods, and dietaries based upon these analyses are prescribed 
for different sorts of workers, and for different ages of members 
of a family. At present the science does not pretend to any 
large amount of accuracy, indeed wide divergences still exist in 
its very foundations. But there is no reason to doubt that further 
analysis and experimentation may be able to reach food stand- 
ards which on the consumption side will correspond to the econo- 
omy of standard methods of work under scientific management. 
It may be quite possible to lay down with considerable exacti- 
tude the amounts and combinations and intervals of food for 
coal-miners, weavers, clerks, motor-men, etc., together with 
estimates of the amount of expenditure required to maintain the 
different forms of industrial efficiency. The productive value 
of other elements of the wage-earner 's expenditure will not indeed 
admit of so much exactitude, partly because his own 'utility' 
obtained from such expenditure will not easily be separable 



SCIENTIFIC MANAGEMENT 223 

from that of his family. But though family expenditure cannot 
thus be regarded as exclusively directed by productive con- 
siderations, the physical efficiency which is its chief test may be 
regarded primarily as an industrial asset. Indeed, this view 
is implicit in most talk of standards of comfort and in most 
discussions of a 'minimum' or 'living' or 'subsistence' wage. 
It means such wage as, economically expended, will enable a 
wage-earner to rear an average family in that measure and kind 
of efficiency required to do work of a sort similar to that by which 
he earns the wage. No doubt this notion is tempered by some 
slight considerations of education and of betterment. But 
productive efficiency is always the basic factor. Food and hous- 
ing, by far the most important elements in working-class ex- 
penditure, are clearly in process of being standardised by hy- 
gienics in the service of a science of productive consump- 
tion. 

§ 12. Two other sciences, by which society may seek to stand- 
ardise the lives of workers, are e ugenics and education. In both 
of these the humanists may have a fierce battle to fight against 
the dominion of the industrialists. Eugenics, if it can get recog- 
nition as a social art, will regulate marriage for the purposes of 
good stock. But good for what? Perhaps for industry and war, if 
some speciaKsts should have their way. So too with education. 
Primary education has already been ear-marked in our towns 
for the production of cheap clerks, and technical and professional 
training under various guises invade our citadels of higher learn- 
ing. All is part of the same great claim of society to economise 
and standardise the body and the mind of its citizen, primarily 
in order that he may do more efficiently the social or routine 
services it requires of him. 

This economic standardisation, as we recognise, is not identical 
in motives or in operation as it bears respectively upon the pro- 
ductive and consumptive functions. On its productive side it 
is regulated by considerations of private business profits. Its 
primary aim is to get men to work in such a way as to produce 
the largest margin between the wage necessary to evoke full 
efficiency under 'scientific management' and the market value 
of the output. Indirectly, it is claimed, this policy redounds to 



224 WORK AND WEALTH 

the advantage of industrial society in an increase of the body 
of consumable wealth, some considerable share of which will 
pass into the general store. On its consumptive side the scien- 
tific standardisation works differently. It is plied more directly 
as a social-economic art, working out for the family, as well as 
for the individual workman, a standard of Hving, physical, in- 
tellectual, and moral, conducive to the interests of society re- 
garded as an economic or wealth-producing entity.-^ But though 
society, in thus seeking to secure standards of economic effi- 
ciency for its family units, is not directly concerned in further- 
ing the profit-seeking ends of private business firms, indirectly 
it is doing so. For, so long as expenditure of income, or family 
budgets, are estimated strictly in accordance with the economic 
efficiency they yield to the present and prospective working 
members, the process is in reality supplementary to the science 
of business management. For the better birth, better rearing, 
better health and education which it furnishes, will all even- 
tually be translated into larger quantity and better quality of 
labour-power for scientific management to handle in its various 
profit-making processes. 

Now the thoughtful members of the working-classes have 
always half-instinctively regarded with some suspicion the en- 
deavours of social reformers to make them use cheaper foods 
yielding more nutriment for the money, temperance movements 
to keep down their conventional necessaries, and technical 
education to make their labour-power more productive. For 
they have doubted whether the cheaper living or the increased 
productivity would necessarily come home to them in improved 
conditions of life. Nor has their suspicion been wholly ground- 
less. Though in the long run, it might seem to follow that as 
consumers and even perhaps, though less surely, as wage-earners, 
they would get some gain from the more economical use of their 
labour-powers, the bulk of the visible gains might very well 

^ This rationalisation of life for distinctively economic purposes, alike on its pro- 
ductive and expenditure side, has been carried further by the Jews than by any other 
people, i. e., their religion, politics, eugenics and education have been directed more 
exclusively and more rationalistically towards the business arts in which they excel, 
those of the financier, undertaker, trader, than in the; case of other peoples. 

See Sombart, The Jews and Modern Capitalism, Chs. IX and X. 



SCIENTIFIC MANAGEMENT 225 

pass into the hands of the employing classes in higher profits or 
salaries of management. 

This consideration opens the deeper criticism which hmnan- 
ism and Sociology are entitled and required to press upon the 
policy of the industrial economists. Every improvement in the 
technique of the arts of industry or of consumption may be con- 
sidered as conducive to economic progress, yielding an increase 
of marketable wealth. But, if such improvements increase the 
human costs of production, or diminish the human utilities of 
consumption, as may happen if they consist largely in the 
standardising of productive and consumptive processes, they may 
bring no increase, possibly may bring a decrease, of human 
welfare. Proposals for scientific management or for standardised 
dietaries are not indeed to be condemned, upon the general 
application of such criticism. For it is agreed that such standard- 
isation within certain Hmits is socially advantageous. The 
question, therefore, is partly one of degree, partly as to the 
security there exists that the economic gains of the improved 
economy shall be properly apportioned. 

§ 13. But the final test would not consist in determining 
whether increased costs and diminished utilities did or did not 
offset the prima facie advantages of the economic improvements. 
The art of social welfare, humanism, will insist upon considering 
the reactions of the standardisation of work and consumption 
upon other faculties and functions than the economic, and in 
considering prospective as well as present gains. A scientific 
rigour in economy of work and of expenditure, which should 
remove, both from the industry and the lives of the great masses 
of a population, all opportunities for initiative, experiment, 
risk-taking and the display of personafity, might reduce the 
human value of life for the average man, and so impair 
the worth of the society. Humanism, therefore, while ap- 
proving the apphcation of science to the arts of production 
and consumption, insists that it shall be shown to be the 
servant not the master of humanity. Such proof is sought, 
because the assumption, so often made, that all such eco- 
nomic progress must be humanly profitable, is seen to be un- 
warranted. 



226 WORK AND WEALTH 

A 'scientific' view of human industry would establish the 
following lines of investigation. 

(i) The productive abihty of each producer would be con- 
sidered in relation to its technical efficiency, i. e., the 
best way for him to do his job. 

(2) His special productive function would be considered in 

its reactions (a) upon his general standard of life on 
its economic side, i, e., in relation to his productive 
and consumptive functions; (b) upon his individual 
human life. 

(3) The standard of consumption of each consumer would 

be considered in relation to its technical efficiency (a) 
for purposes of production; (b) for purposes of indi- 
vidual welfare. 

(4) Industry as a social function would be subjected to criti- 

cism from the wider standpoint of social welfare, i. e., 
as one element contributing to the life of a nation. 

Finally, an analysis of the human worth of existing industry 
on its productive and consumptive sides would not suffice. For 
such an analysis merely accepts the existing system of industry 
and enquires into the best human methods of working it. 

But humanist criticism must, of course, go behind this accept- 
ance. The problem of industry which it will envisage will be 
one that takes as its data the existing resources of the nation, 
natural and human, and considers how these resources may, in 
accordance with present knowledge, be best applied for the pro- 
vision of organic welfare according to the best accepted inter- 
pretation of that term. However difficult it may be to secure, 
to justify and to apply that standpoint, this is the form in which 
the economic problem must present itself to the statesman, the 
publicist, and the social reformer, so far as they are clear-sighted, 
rational and disinterested in their work. 

So regarded, each individual would be considered as a complex 
of activities and wants, whose specialised work for society must 
be harmonised with that freedom and exercise of his non- 
speciahsed functions needed to enable him to realise himself as 
a human personality. Due consideration would be given to the 
interplay of his productive and consumptive functions within 



SCIENTIFIC MANAGEMENT 227 

his economic life. His economic life must, however, be kept in 
due subordination to his wider human life, consisting, as the 
latter does, mainly of non-economic functions. 

Finally, his economic and human life as a personality must 
be harmonised with the economic and human Hfe of the society 
of which he is a member. 

Such are the main implications of what might be termed the 
human scientific calculus of industrial values. 



CHAPTER XV 

THE DISTRIBUTION OF LEISURE 

§ I. Leisure, regarded as an economic good, comes under the 
general law of distribution of wealth. But the notorious defects 
of its distribution, and their human consequences, are such as to 
claim for it a separate place in our enquiry. Modern indus- 
trialism by its large unearned surplus has greatly increased the 
size of the leisure classes. For wherever such surplus goes, 
there is the possibihty and probability of a life of leisure. In 
our study of Consumption we traced the part played by con- 
spicuous leisure as an element of pride and power in the economy 
of the rich. In Great Britain the size of this leisure class is by 
no means measured by the number of those who stand in the 
census as 'unoccupied.' In the top stratum of the business 
world we find considerable numbers of the directing and man- 
agerial class who are seldom or ever 'busy.' Their office hours 
are short and irregular, their week-ends extend from Friday to 
Tuesday, their holidays are long and frequent. 

Most of their leisure is accompanied by profuse consumption, 
involving thus from the standpoint of society a double waste, 
a waste of time and of substance. Where does all this leisure 
come from? The answer to this question seems tolerably simple. 
It has often been observed that labour-saving machinery and 
other devices for abridging human toil have done very little to 
lighten or shorten the work-day for the workers. What then 
has become of the labour that is saved? Most of it has gone to 
enlarge the leisure of the leisured class, or perhaps we should 
say, of the leisured classes. For we saw that there existed a 
lower as well as an upper leisure class, a necessary product of 
the same mal-distribution of resources as sustains the latter. 
For an industrial system that grinds out unproductive surplus 
breaks down the physical and moral efficiency of large numbers 
of actual or potential workers as a by-product of the overdriving 

228 



THE DISTRIBUTION OF LEISURE 229 

and underfeeding process. The reckless breeding of the class 
thus broken down furnishes a horde of weaklings, shirkers and 
nomads, unassimilated, unassimilable by the industrial system. 
These beings, kept alive by charity and poor-laws, have grown 
with modern industrialism and constitute the class known as 
* unemployables. ' They are often described as a ' standing men- 
ace to civilisation, ' and are in fact the most pitiable product of 
the mal-distribution of wealth. 

§ 2. But the irregularities of modern production and con- 
sumption are also responsible for a vast amount of involuntary 
and injurious leisure among the genuine working-classes. That 
leisure is commonly termed *unemplo3niient.' It is not true 
leisure, in the sense of time for recreation or enjoyment, though 
it might become so. For the most part it is at present wasteful 
and demoraKsing idleness. 

A certain amount of unemployment is of course unavoidable 
in any organisation of industry. There will be some leakage of 
time between jobs and unpredictable irregularities of weather 
and climate will involve some idleness. Expansions and con- 
tractions of special trades, changes in methods of production 
and of consumption, the necessary elasticity of economic life, 
will continue to account for the temporary displacement of 
groups of workers. There is, of course, no social wastage in 
this process, if it is properly safeguarded. But hitherto it has 
been a great source of individual and social waste. Society is 
only beginning to realise the duty, or indeed the possibility, of 
taking active steps to reduce the quantity of this unemployment 
and to utilise what is unavoidable for the benefit of the unem- 
ployed and of society. The cultivation of these spare plots of 
time in the normal hfe of the workers may become a highly 
serviceable art. 

If all unemplojrment could be spread evenly over the working 
year, taken out in a shortening of the ordinary working-day and 
in the provision of periodic and sufficient holidays, an immense 
addition would be made to the sum of industrial welfare. Thus, 
without any reduction in the aggregate of labour-time, a sensible 
reduction in the human cost of labour might be achieved, if law, 
custom, or organised labour policy made it impossible for em- 



230 WORK AND WEALTH 

ployers to vary violently or suddenly the volume of employment 
and to sandwich periods of over-time with periods of short-time. 
These baneful irregularities of employment appear inevitable so 
long as they remain permissible, as do sweating wages and other 
bad conditions of labour. When they are no longer permissible, 
the organised intelligence of the trade will adjust itself to the 
new conditions, generally with little or no loss, often with positive 
gain. 

If there are trades upon which season, fashion, or other un- 
controllable factors impose great irregularity of employment, 
a sound social policy will have close regard to the nature of this 
irregularity. Where an essentially irregular trade is engaged 
in supplying some necessary or convenience of life, as, for in- 
stance, in gas-works and certain branches of transport, alter- 
native trades may be found whose fluctuations tend to vary 
inversely with those of the former trades, and which can furnish 
work suitable in kind and place to those who are out. 

Statistics of employment show that the aggregate of employ- 
ment during any given year does not vary much. It would vary 
less, if every man engaged in an essentially irregular trade had 
an alternative, in which he was qualified to earn a living when 
employment in the other trade was short. For there is httle 
truth in the contention that speciaUsation for most manual 
trades is carried so far that an alternative or subsidiary employ- 
ment spoils a worker for efficiency in his prime trade. If there 
are any necessary trades for whose unavoidable unemployment 
no such effective provision can be made, society must either 
saddle the trade with the obligation of keeping the 'reserve' 
of labour while it stands in waiting, or it must itself undertake 
the administration of the trade as one which cannot safely be left 
in private hands. In the case of fashion or luxury trades, which 
furnish many instances of greatest irregularity, legal prohibition 
of over-time will often operate most beneficially. Where much 
unemployment still remains, a high contribution to an un- 
employed insurance fund would stimulate advantageous re- 
adjustments. Finally, if there are trades incapable of bearing 
the true costs of maintenance of the labour they employ, it 
would still be right to place on them the obligation to do so, 



THE DISTRIBUTION OF LEISURE 231 

for their destruction will be a gain not a loss to a society that 
understands its human interests. 
\.. But the main problem of leisure would still remain unsolved. 
For the normal burden of industrial toil, imposed by our present 
economic system upon most workers, is excessive. That excess 
consists primarily in duration of the work-day, though aggra- 
vated in many cases by intensity or pace of working. Great 
num^bers of workers, especially among women, are employed 
in occupations where neither law, custom, nor trade organisation, 
imposes any limits. No factory day affects the employees in 
shops or offices or most warehouses, or in most transport trades, 
or in domestic service — departments of em.plo3nTient which 
absorb a rapidly increasing number and proportion of the em- 
ployed population. There are vast numbers of domestic work- 
shops and home trades in which men and women are employed, 
where all hours are worked. No legal restrictions of hours are 
set upon adult male labour in manufacturing and other in- 
dustrial work in most of the metal and other trades which are 
exclusively or predominantly men's employments, though in 
trades v^rhere women also are employed restrictions are often 
imposed which in fact extend to men the factory day. 

But there is a generally recognised feeling that the length of 
the factory day is gravely excessive, that io>^, or even 9 hours 
per diem, under modern conditions of speeded-up machinery 
and nervous tension, involve too heavy a human cost. 

§ 3. It is this growing volume of feeling that has crystallised 
in the demand for an eight-hours day. This is no immoderate 
demand. A regular contribution of eight hours' working energy 
of hand, or brain, or nerves, to some narrow routine process, is 
as much as, or more than, the ordinary man or woman can 
afford, in the wholesome interest of his personality, to give up to 
society. For we have recognised quite clearly that a speciaKsa- 
tion of function, a division of labour, growing ever finer, is 
required of the individual in the interests of society. He must 
make this apparent sacrifice of his private tastes, feelings and 
interests, for the good of the society of which he is a member. 
It is not, as we perceive, a real sacrifice, unless the demand 
made upon him is excessive, for the good of the society he serves 



232 WORK AND WEALTH 

is his good, and what he gives out comes back to him in par- 
ticipation of the common life. But, when the task imposed is too 
long or too hard, the sacrifice becomes an injury, the encroach- 
ment upon the human life of the worker inflicts grave damage, 
which damage again reacts upon society. 

The stress of the Labour Movement upon the urgency of 
shortening the work-day to-day is extremely significant. It 
testifies to two advances in the actual condition of the labouring 
classes. In the first place, it indicates that some substantial 
progress has been made towards a higher level of material 
standard of consumption. For workers on the lower levels of 
poverty dare not ask for reduced hours of labour, involving, 
as may well occur, a reduction of pay. Workers struggling 
for a bare physical subsistence cannot afford to purchase 
leisure. 

Of course I know that even the better-to-do workers who 
voice a demand for an eight-hours day are not ready to proclaim 
their willingness to pay for it in diminished wages. Nor need 
tiiey in all cases. Where the shorter day is attended by improved 
efficienc)/ or increased intensity of labour, or merely by better 
organisation of the business, there may be nothing to pay. 
More leisure has been squeezed out of the working-day. There 
are many cases where this can be done, for the working-day in 
many instances is wastefully prolonged. But, though in cer- 
tain trades a ten-hours day may be reduced to nine, or even 
eight, without any reduction of output, this is not the case in 
other trades, nor even in the former trades could the process be 
carried far without a loss of output. In a great many employ- 
ments a short working-day will involve a larger economic cost 
of labour, and where, as is usual in competitive trade, this 
larger cost cannot be made good out of profits, labour will have 
to buy this leisure, in part at any rate, by reduced wages. For 
even if he can get it shifted on to the consumer in the shape of 
higher prices, as consumer he will in his turn have to bear a 
part of it. 

Where the demand for shorter hours is genuine, and is not 
a mere cover for extended over-time, to be paid for at a higher 
rate, it must be taken as indicative of the workers' willingness 



THE DISTRIBUTION OF LEISURE 233 

to take part of his share of industrial progress in leisure instead 
of wages. 

§ 4. But leisure, as an economic asset, is not a mere question 
of hours. A shorter work-day might be dearly bought at the 
cost of an intensification of labour which left body and mind 
exhausted at the end of each day. The opposition of workers 
to a policy of speeding-up, or the use of pace-setters, is usually 
a sane act of self-defence, and not the fractious obstruction 
to industrial progress it is sometimes represented. No con- 
siderations of human endurance limit the pace at which ma- 
chinery driven by mechanical power may be worked. Unless, 
therefore, restraints are put by law, custom or bargaining, upon 
the speed of machines, or the number which a worker is called 
upon to serve, competition may impose a work-day which, though 
not unduly long in hours, habitually exhausts the ordinary 
worker. It is not always realised how great a change took place 
when the weaver, the shoemaker, the smith, passed from the 
workshops, where the pace and other conditions of work were 
mostly regulated by their voluntary action, to the steam-driven 
factory. The shoemaker and the tailor under the old conditions 
had time, energy and liberty for thought while carrying on their 
work: they could slacken, break off or speed up, their work, 
according to their inclination. The clicker or heeler in a shoe 
factory, the cutter-out in a clothing factory, have no such meas- 
ure of freedom. This is, of course, a normal effect of modern 
industrialism. Closer and more continuous attention is demanded 
during the working hours. 

Thus the real question of leisure is a question of spare human 
energy rather than of spare hours. The shorter working-day is 
chiefly needed as a condition favourable to spare energy. Though 
therefore, an eight-hours day may not unreasonably be taken as 
a proximate reform, for labour in general, there is no reason why 
the work-day in all occupations should be cut to this or any other 
exact measure. Such arithmetical equality would evidently 
work out most inequitably, as between trade and trade, or pro- 
cess and process in the same trade. In many large departments 
of industry, the transport and distributive trades in particular, 
numerous interstices of leisure are inserted in a day's work, easing 



234 WORK AND WEALTH 

the burden of the day, and sometimes affording opportunity for 
recreation and intercourse. In the more arduous processes of 
manufacture, mining, or in clerical and other routine brain work, 
there is little or no scope for such relaxation. 

But while such considerations evidently affect the detailed 
policy of the shorter day in its pressure on the several occupa- 
tions, they do not affect the general pohcy. 

There can be no doubt that an excessive and injurious amount 
of specialised labour is exacted from the workers by the ordinary 
industrial conditions of to-day In nearly all industrial processes. 

§ 5. The first plea for a shorter day is one which our analysis 
has made self-evident. 

It will greatly reduce the human cost of production In most 
processes. For, as we recognise, the strain of muscular and nerv- 
ous fatigue, both conscious and unconscious, gathers force and 
grows with great rapidity during the later hours of the work- 
day. Though the curve representing the variations of the human 
cost will of course differ in every sort of work and for different 
workers, their age, sex, strength, health and other personal con- 
ditions affecting it, the last hours of each shift will contain a 
disproportionate amount of fatigue, pain and other 'costs,' 
i^^-while the quality and quantity of the work done In these last 
hours will be inferior. 

If out of any stock of material goods, we were able to separate 
the product of the last hour's work from that of the earlier hours 
in the work-day, and could subject it to the analysis of human 
cost and utility, which we have endeavoured to apply to the 
general Income, what should we find? This last increment of 
the product would contain a heavier burden of human cost of 
production than any of the earlier Increments. Again, turning 
to the consumption side, what should we find? This last in- 
crement must be considered as furnishing the smallest am.ount 
of human utility In its consumption. Indeed, if we are right in 
holding that a considerable fraction of each supply, even of 
what are commonly classed as material necessaries of life, such 
as foods, clothings, etc.. Is wastefully or even detrimentally con- 
sumed by the well-to-do, there Is reason to hold that this last in- 
crement of product. Involving the largest human cost in Its 



THE DISTRIBUTION OF LEISURE 235 

production, contains no utility but some amount of human dis- 
utility in its consumption. 

If this analysis be true, the last hour's work may be doubly 
wasteful from the standpoint of human welfare. 

Of the £2,000,000,000 which constitutes our income it may 
very likely be the case that £200,000,000 of it represents wealth, 
which, from the human standpoint, is 'illth, ' alike in the mode 
of its production and of its consumption. If it had not been 
produced at ail, the nation might have been far better off, for by 
abstaining from the production of this sham wealth, it would 
have produced a substantial amount of leisure. 

It is of course true that the particular groups of producers, 
who by their last hour's labour made these goods, may not have 
been losers by doing so; their heavy toil may have been compen- 
sated by the enhanced wage which they could not otherwise have 
got, and the loss of which would have injured their standard of 
life. It is, indeed, the operation of competition upon wages that 
actually forces into existence this sham-wealth. Drawn out of 
over-wrought workers by the unequal conditions of the wage- 
bargain, it passes into wasteful consumption by the back-stroke 
of the same law of distribution, which pays it away as * surplus' 
or 'unearned' wealth. 
^^y^t is only the clear consideration of its production and con- 
sumption from the social standpoint that exhibits the waste of 
the last hour's product. 

But from the standpoint of the individual worker the economy 
of a shorter work-day has a double significance. We have seen 
that it more than proportionately diminishes his personal cost, 
by cancelling the last and most costly portion of his work-day. 
But it also increases the human utility which he can get out of 
his wages. A day of exhausting toil entails the expenditure of a 
large portion of his wage in mere replacement of physical wear 
and tear, or incites to expenditure on physical excesses, while 
the leisure hours are hours of idleness and torpor. A reduction 
of the work-day will, by the larger leisure and spare energy it 
secures, reduce the expenditure upon mere wear and tear, and 
increase the expenditure upon the higher and more varied strata 
of the standard of comfort. More leisure will in general so alter 



236 WORK AND WEALTH 

the mode of Kving as to enable the worker to get more and better 
utility out of the expenditure of his wages. Take an extreme 
case. A man who toils all day long at some exhausting work, and 
goes home at night too tired for anything but food and sleep, so 
as to enable him to continue the same round to-morrow, though 
he may earn good wages from this toil, can get little out of them. 
If he were induced to work less and leave himself some time 
and energy for relaxation and enjoyment, he would get a larger 
utility out of less money income. 

The matter, however, does not need labouring. It is evident 
that many modes of consumption depend in part, for the pleasure 
and gain they yield, upon the amount of time given to the con- 
suming processes. It would be mere foolishness for a tired 
worker to spend money upon improving books which he had 
not the time and energy to digest. Shorten his hours, leave him 
more energy, such expenditure may be extremely profitable. 
Even the enjoyment and good of his meals will be increased, if 
he has more time and energy for wholesome processes of digestion 
and for the exercise which facilitates digestion. And what is 
true of his food will hold also of most other items in his standard 
of consumption. No consumption is purely passive: to get the 
best utility or enjoyment out of any sort of wealth, time and 
energy are requisite. The greater part of a workman's income 
goes to the upkeep of his home and family. Does the normal 
work-day in our strenuous age permit the bread-winner to get 
the full enjoyment out of home and family? He belongs per- 
haps to a club or a cooperative society. Can he make the most 
of these opportunities of education and of comradeship, if his 
daily toil leaves him little margin of vitality? Most of the grow- 
ing public expenditure which the modern State or City lays out 
upon the amenities of social Hfe, the apparatus of libraries, 
museums, parks, music and recreation, is half wasted because 
industry has trenched too much upon humanity. 

§ 6. More leisure means an increased fund of utihty or welfare 
got out of the income at the disposal of each worker. 

This introduces us to the fuller economy of leisure regarded 
as the opportunity of opportunities — the condition of all effective 
social reconstruction and progress. 



THE DISTRIBUTION OF LEISURE 237 

Consider it first in relation to industrial welfare. We have 
seen how society enforces its claims upon the worker by division 
of labour and specialisation of functions. This specialisation is 
usually justified by the variety of consumption which it yields. 
But will not this more complex and refined consumption in 
large part be wasted or perverted to base ends, if the producer 
becomes ever narrower in his productive function? 

The Organic Law presses here insistently. It would be going 
too far, doubtless, to assert that he who can produce one thing 
can only consume one thing. But everyone familiar with the 
finer arts of Consumption will admit that a consumer who is 
utterly unskilled in the production of these goods cannot extract 
from their consumption the full enjoyment or utihty which they 
contain. A true connoisseur of pictures must, in training and 
in study, be a good deal of an artist: the exquisite gourmet must 
be something of a cook. 

In other words, our industrial civilisation offers a dangerous 
paradox, if it merely presents man exposed to two opposed 
forces, tending on the one hand to greater narrowness of pro- 
duction, on the other, to greater width and complexity of con- 
sumption. To solve this paradox is the first service of the large 
new fund of leisure which, for the first time in history, the new 
economies of industry render available not for a little class but 
for whole peoples. 

The first use of leisure, then, is that it supplies a counterpoise 
to specialisation by the opportunity it gives for the exercise of 
the neglected faculties, the cultivation of neglected tastes. As 
the specialisation grows closer, this urgency increases. More 
leisure is required for the routine worker to keep him human. 

In the first place, it must afford him relaxation or recreation 
by occupations in which the spontaneity, the liberty, the elements 
of novelty, increasingly precluded from his work-day, shall find 
expression. It must liberate him from automatism, and afford 
him opportunity for the creative and interesting work required 
to preserve in him humanity. 

An eight-hours day would mean that thousands of men, who 
at present leave the factory or furnace, the office or the shop, 
in a state of physical and mental lassitude, would take a turn at 



238 WORK AND WEALTH 

gardening, or home carpentry, would read some serious and 
stimulating book, or take part in some invigorating game. 

Thus each man would not merely get more out of each item 
of his economic consumption, but he would add to the net sum 
of his humanity, and incidentally of his economic utility, by cul- 
tivating those neglected faculties of production which yield him 
a positive fund of interest and human benefit. 

§ 7. So far I have set forth the economy of leisure from the 
standpoint of physical and moral health: the order and harmony 
of human powers. This, however, is in the main a statical 
economy. Now, Order is chiefly valuable as the means of Pro- 
gress, Health as the means of Growth. The dynamic economy 
of Progress demands leisure even more insistently. 

Everyone will formally admit that Education is impossible 
without leisure. It is often pointed out that the Greek word 
which has been converted into our word ' School ' means Leisure. 
One might, therefore, suppose that the utmost care would be 
taken to get the fullest use out of the leisure which child-life 
affords, and to ensure that throughout life there should remain 
a sufflcient supply of this raw material of progress — the surplus 
energy beyond the bare needs of existence needed for organic 
growth. 

The prodigal waste of this sacred store of leisure for child-Hfe 
in the processes of our Elementary Education is only too famihar 
to all of us. Mr. Stephen Reynolds ^ hardly overstates the case 
when he says, 'It gives to the children about three years' worth 
of second-rate education in exchange for eight or nine years of 
their life. ' ^ 

1 believe that the trained educationalist of the next genera- 
tion, examining the expensive education given even in the best- 
equipped of our secondary schools and our universities, in the 
hght of a more rational conception of human progress, will find 

^ (Times, 23 Dec. 1912.) 

2 The best that can be said for this education has recently been said by Mr. George 
Peel, who writes of London children {The Future of England, p. 96) : 

'They spend 28 hours a week continuously during nine years under fairly satis- 
factory conditions of air, warmth and light, engaged in wholesome and stimulating 
pursuits. Considering what their homes often are, this itself must be reckoned an 
immense benefit.' 



THE DISTRIBUTION OF LEISURE 239 

at least as large a waste of opportunity in these seats of learning 
as in our elementary schools. Not until educational standards and 
methods are better adjusted to true conditions of the vital pro- 
gress of individuals and of societies, will the chief significance 
of leisure be realised. 

§ 8. But the value of leisure is by no means exhausted by 
these considerations. The finest fruits of human fife come not 
by observation. To lay out all our spare time and energy to the 
very best advantage by a scrupulous seizure of opportunities is 
in reality a false economy. Industrialism has undoubtedly done 
much both to discipline and to educate the powers of man. But 
it has preached too arrogantly the gospel of economy and in- 
dustry. It is not good for any man to account for his time either 
to himself or to another, with too great exactitude, or to seek to 
make a mosaic of his days. The Smilesian philosophy of thrift 
and industry imparts more calculation into Hfe than is good for 
man. We should not be so terribly afraid of idleness. Dr. Watts 
held that ' Satan finds some mischief still for idle hands to do. ' 
But far saner is Wordsworth's view, 'that we can feed this mind 
of ours in a wise passiveness,' and Thoreau's demand for a 
'broad margin of Hfe.' 

We are not yet sufficiently advanced in psychology to know 
much of the processes within the mind by which novel thoughts 
and feelings seem to enter of their own accord, starting new im- 
pulses to action, or by which the unchecked imagination works 
along some rapid line of intuition. But that such seasons of 
vacancy and reverie are essential to many of the finest processes 
of the intellect and heart, is indisputable. To deny this to any 
man is to deprive him of a part of his rightful heritage of human 
opportunity. The inventor, the poet, the artist, are readily 
allowed such free disposal of time. Everyone allows that genius 
must have ample periods of incubation. But the implication 
that common men ought to have their faces kept to the grind- 
stone is quite false. Everybody wants leisure for his soul to 
move about in and to grow, not by some closely prescribed plan 
of education, but by free experimentation of its secret powers. 
A very slender harvest of happy thoughts and feelings will 
justify much apparent idleness. 



240 WORK AND WEALTH 

In the narrower investigation of methods of industry which 
we essayed, we realised the critical part played by leisure in the 
art of invention. The lack of leisure for the great majority of 
workers is assuredly a waste of inventive power. We think our 
society prolific in inventions, especially in the age we are living 
in, but it is likely that the pace of progress through industrial 
inventions would be greatly quickened if the proper play-time 
of the mind were not denied to the great majority of men and 
women. 

Biologists and psychologists have made many interesting en- 
quiries into the motives that prompt animals and human beings 
to play. The forms of play, the rhythm or patterns into which 
the organic cooperations of muscular and nervous tensions and 
discharges cast themselves, are found to have some direct re- 
lation to the serious pursuits of adult life, the protection against 
enemies, the pursuit of prey and other food, courtship, mating 
and the care of the young, and the corporate movements nec- 
essary for the protection of the horde or tribe. So interpreted, 
play is an instinctive education for life. Nature is full of in- 
directness, and a great deal of this play is not closely imitative 
of any particular sort of useful activity but is directed to- general 
fitness. This applies particularly to the higher animals who are 
less exclusively directed by separate particular instincts and are 
liable to have to meet novel and irregular emergencies that call 
for general adaptability of body and of mind. The play of higher 
animals and especially of human young will thus run largely 
into forms in which the intellectual and emotional powers will 
have large scope, where spontaneous variation and free imagina- 
tion will express themselves, and where the more or less routine 
rhythms of the primitive dance or song or mock fight will pass 
into higher forms of individual cunning and competitive exploit, 
having as their main biological and social 'meaning' the practice 
of an efficient mental and emotional equipment. Play thus con- 
sidered is an experimentation of vital powers. Its utility for 
child-life is commonly admitted. In fact, there is a grave danger 
lest the spontaneity and instinctive direction which nature has 
implanted should be damaged by the attempts of education- 
alists to force the vital utihty of play by organising it into 



THE DISTRIBUTION OF LEISURE 241 

'set games.' Though we need not rudely rule out reasonable 
regulation from this, as from any other department of life, it 
would be well to remember that play has powerful directive 
instincts behind it in child-life which adult notions of economy 
may gravely misconceive and injure by over-regulation. Hasty 
endeavours to displace instinct by reason in child-life are likely 
to prove costly to human welfare in the long run. The spon- 
taneous joy of those activities of childhood that seem most 
'wasteful' is probably a far better index to welfare than any 
pedagogic calculations. 

But because the human utility of play is great for children, 
it does not follow that it is small for men and women. Even the 
physiological and much more the psychological utility of play 
lasts through life, though doubtless in diminishing value. For 
adult workers mere repose never exhausts the use of leisure. 
The biological or the social utility of his play may be much 
smaller than in the case of the young. But it will remain con- 
siderable. Nor is this utility chiefly expressed in the relation 
between play and invention. The chief justification for leisure 
does not consist in its contribution to the arts of industry but 
rather in raising the banner of revolt against the tyranny of 
industry over human life. 

§ 9. We have grown so accustomed to regard business as 
the absorbing occupation of man, that which necessarily and 
rightly claims the major part of his waking hours, that a so- 
ciety based on any other scale of values seems inconceivable. 
Though history has made us famihar with civilisations, such 
as those of Athens and of Rome, where a large body of 
free citizens regarded politics, art, literature and physical 
recreations as far more important occupations, we know that 
such civilisations rested on a basis of slave labour. We do 
not seem to realise that for the first time in history two 
conditions are substantially attained which make it technically 
possible for a whole people to throw off the dominion of toil. 
Machinery and Democracy are these two conditions. If they 
can be brought into effective coordination, so that the full eco- 
nomics of machine production can be rendered available for the 
people as a whole, the domination of Industry over the lives, the 



242 WORK AND WEALTH 

thoughts, and the hearts of men, can be overthrown. This is the 
great problem of social-economic reconstruction, to make in- 
dustry the servant of all men, not the servants of the few, the 
masters of the many. Its solution demands, of course, that 
after the wholesome organic needs are satisfied, the stimulation 
of new material wants shall be kept in check. For if every class 
continues constantly to develop new complicated demands, 
which strain the sinews of industry even under a socially-ordered 
machine-economy, taking the whole of its increased control of 
Nature in new demands upon Nature for economic satisfaction, 
the total burden of Industry on Man is nowise lightened. If we 
are to secure adequate leisure for all men, and so to displace the 
tyranny of the business life by the due assertion of other higher 
and more varied types of life, we must manage to check the lust 
of competitive materialism which Industrialism has implanted 
in our hearts. 

I am aware how difficult it is to translate these handsome 
aspirations into practical achievement. To urge the working- 
classes of this country, or even considerable sections of the 
middle-classes engaged in the trades and professions, to sacrifice 
some immediately attainable rise in their material and intellect- 
ual standard of comfort, in order thereby to purchase more 
leisure, will be taken to indicate a blank ignorance of the actual 
conditions of their lives. I shall be reminded that recent sta- 
tistics of wages in this country show that about one-third of our 
working-class families are living upon precarious weekly incomes 
amounting to less than 255. a week, and that this computation 
does not take into account a large body of the population living 
upon casual earnings indefinitely lower than tliis sum. Now Mr. 
Rowntree and other searchers into working-class expenditure 
have shown that 255. will hardly purchase for an ordinary family 
in any English town a sufficiency of food, clothing, housing, 
fuel and other requisites to maintain its members in full physical 
efficiency. It will seem idle to contend that working-people in 
this case would do well to prefer a shortening of their working 
day, however long it be, to an increase of their wages. None of 
the considerations I have urged relating to the better utilisation 
of their consumption will be held to justify so obviously wasteful 



THE DISTRIBUTION OF LEISURE 243 

a policy. These workers simply cannot afford to buy more leisure 
at so high a price. They dare not sacrifice any fraction of their 
current wages to procure a reduction of hours from ten hours to 
eight, even if the conditions of their trade otherwise admitted 
such a change; and if increasing prosperity in their trade presents 
them with the option of obtaining higher wages or shorter hours, 
their pressing demands for better food and housing will rightly 
compel them to choose the former of the two alternatives. 

Nor is this reasoning refuted by dwelhng upon the undeniable 
facts, that most standards of working-class comfort contain 
elements of conventional consumption which might be cut out 
with positive advantage, and that, apart from this, a more in- 
telligent housekeeping would enable most of them to do much 
better with their actual incomes than they do. For when a due 
allowance has been made for such errors or extravagance, the 
ordinary labourer's wage in town and in country still remains 
below the margin of family efficiency. Of course, in almost 
every occupation there will be a considerable number of workers 
who, having no family dependent on them, will have some means 
at their disposal for comforts, luxuries, saving or leisure. But 
the normal standard wage for unskilled or low-skilled labour in 
this country does not appear to have attained a height at which 
the purchase of a shorter working day is sound economy. We 
must always bear in mind, besides, that the existence in a trade 
of even a considerable minority of workers who could afford to 
take in increased leisure what they might take in enhanced wages, 
would not make this step practicable or desirable. For most 
trades are now so organised that a common standard working 
day is even more essential than a uniform rate of wages. 

These facts enable us to reahse why it is that so much elas- 
ticity or ambiguity attends the actual labour movement for a 
shorter working day. The demand is seldom framed in such a 
way as to preclude the common use of over-time, though such a 
use of course defeats the aim for leisure, converting it into an 
aim for higher wages, the time and a half rate usually paid for 
over-time. 

But, though this open or secret competition between more 
leisure and more wages continues to take place in trades where 



244 WORK AND WEALTH 

general conditions of labour are improving, the relative strength 
of the claim for leisure is advancing. There comes a point in the 
improved conditions of each working-class when the demand for 
liberty and ease and recreation begins to assert itself with so 
much insistence that it outweighs some part of" the chronic de- 
mand for higher wages. Though workers are usually reluctant to 
admit the economic necessity of making a wage-sacrifice in order 
to purchase leisure, and will hardly ever claim a shorter day, if 
they know it to involve an actual fall of wages, they will some- 
times risk this fall, and more often they will forego a portion of 
a contemplated rise of wage, so as to get a shorter day. The 
strength and effectiveness of this demand for leisure in com- 
parison with wages must, of course, vary with the actual standard 
of comfort that obtains, the onerousness or irksomeness of the 
work, the age, sex and intelligence of the workers, and the va- 
riety and sorts of opportunities which increased leisure will 
place at their disposal. In the ordinary English feudal village, 
or even in the small country town, leisure commonly means 
torpor qualified by the pubHc-house. The price of such leisure, 
in terms of sacrifice of wage, would be very low, for the utility in 
the sensational enjoyment of the leisure would be slight as com- 
pared with the substantial addition to the material standard of 
family comfort which even a shilling would afford. On the other 
hand, to the better-paid mechanic, compositor, or skilled factory 
worker, where the family wage was relatively high, and where 
organised city life presented many opportunities for the use and 
enjoyment of leisure, it might seem well worth while to pay 
something in cash for the advantage of a longer evening. 

§ lo. This problem, of course, is merely one illustration of the 
complicated issues which arise in any orderly study of the 
human economics of class and individual standards of consump- 
tion. Even such a merely cursory glance at this delicate organic 
problem will serve to expose the fatuity of so much of the crude 
dogmatic criticism lavished upon working-class economy by 
well-to-do reformers who have not sufficient imagination or 
discretion to abstain from applying the standards of valuation 
appropriate to an income of £i,ooo a year to a family living upon 
£60 a year. The exact income-point where a West Ham worker 



THE DISTRIBUTION OF LEISURE 245 

can afford to observe the legal requirements against overcrowding 
by hiring another room, where he can join a Club with a reason- 
able chance of keeping up the subscriptions, where he can afford 
to keep the boys or girls at school beyond the legal age-limit, 
such questions cannot be settled by general maxims as to the 
duty of thrift or the advantages of education, or even the dangers 
of bad sanitation. It must be remembered that even in this 
highly-civilised and Christian land there are still some millions of 
people who cannot afford to set aside anything for a rainy day, 
or to let their children enjoy the education which the State 
freely provides, or even to obey some of the fundamental laws 
of health. As the family wage rises beyond a bare minimum of 
current subsistence, a point will emerge where each of these and 
many other sound practices becomes economically feasible: the 
particular income-point, of course, will differ with each family 
according to its composition, its needs, and the opportunities 
of meeting them. 

What applies so evidently to the narrow incomes of the wage- 
earners is, of course, equally apphcable to the higher incomes 
of other classes. The well-to-do professional man recognises 
that an annual expenditure of five or even ten per cent of his 
income on holidays may be a sound economy, just as he cal- 
culates that he is doing better for his son by spending £1,000 on 
his professional training than by putting him to business at 
sixteen with the same sum for capital. Not only is it impossible 
to generalise for a whole people, or for all famihes in a given 
trade or of a given income, but there will be no two cases where 
a rising income ought to be laid out precisely in the same way. 
This is of course nothing else than saying that, as no two persons, 
or families, are precisely alike in physical and moral make-up, 
in tastes, needs, opportunities, their expenditure cannot rightly 
be the same. 

Though this belongs to the most obvious of common-places, 
none is more habitually ignored. And that neglect is largely due 
to the fact that the platitudinarian moralist has always been 
allowed to have a free run in the region of commentary on ex- 
penditure. 

Eulogia of thrift and industry have been as indiscriminate 



246 WORK AND WEALTH 

and as unprofitable as diatribes against luxury and idleness. 
What is needed is a flow of orderly investigation into the real 
needs and capacities of the individuals and groups who constitute 
industrial society, not confined to the hard facts which can be 
tabulated and plotted in curves but taking count of those softer 
and more plastic facts which a closer study of human Hfe will 
always show as the main determinants of any art of conduct. 

The place of leisure in the organic standard of a group or class 
or nation will be one of the most delicate problems in such a study. 
Its dehcacy for the individual economy may, indeed, be deduced 
from the expression which we used at the outset of this treatment, 
in describing it as *the opportunity of opportunities.' In other 
words, its human utility to any man, and, therefore, its impor- 
tance, relative to his wages or any other good he gets from them, 
will depend upon the nature of all the opportunities it opens up, 
and that in its turn depends upon the entire sum of those con- 
ditions which we name his Nature and his Environment. 

The progressive acliievement of this economy of leisure is 
closely linked with a gradual reorganisation of industry so as to 
eliminate the large waste of time and energy which present pro- 
ductive methods involve. With science and humanity co- 
operating in the art of social organisation it ought to be 
possible to effect such economies as would place all English- 
men in private possession of the greater part of their 
waking day for their own purposes in life. It requires, 
however, a genuine faith in the organic progress of Human 
Nature to urge with confidence the fuller measure of such 
a reform. We need at least to assume that the normal tendency 
will be towards the use, not the abuse, of more leisure, as of 
higher wages. That some waste will be incurred in learning to 
use leisure, as also in building up each stage in a rising standard 
of expenditure, is of course inevitable. Much might be said 
about the conditions which facilitate the assimilation both of 
leisure and of wages to nourish a higher human life. Race, 
climate, social traditions and surroundings, the nature of the 
work, age, sex and, indeed, many other conditions, must help 
to determine how a given shortening of hours, or enhancement 
of wages, will affect the standard of life. Some crude distinc- 



THE DISTRIBUTION OF LEISURE 247 

tions of great significance have been observed. The Bantu and 
most other Africans, new to processes of wage-labour and to the 
needs of civiHsed hfe, will take the whole of a sudden rise of 
wages in increased leisure, but that leisure wiU be spent almost 
wholly in idleness. Pushful German traders in tropical countries 
commonly complain of the 'verdammte Bedurfnislosigkeit^ (ac- 
cursed wantlessness) of the inhabitants. This low conservative 
standard of living impedes economic processes of exchange. 
It also precludes the fruitful use of leisure, the satisfaction of 
the non-economic needs. Though there is no reason to hold 
that any race or type of man is unprogressive, in the sense that 
his mind is impervious to new wants and is incapable of inciting 
him to new efforts for their satisfaction, the extent and pace of 
such progress vary greatly with the economic environment and 
with the degree of conscious culture hitherto attained. The 
stimuli of economic needs and of non-economic needs will nor- 
mally proceed together, and in the masses of a working popula- 
tion will manifest themselves in a simultaneous demand for 
higher wages and more leisure. But as wages reach a tolerably 
high standard of economic comfort, it might be expected that the 
relatively stronger pressure of the non-economic needs would 
give increasing emphasis to the demand for a shorter and easier 
Vv^orking day. This, indeed, will seem to accord with the general 
claim which socialists as well as individualists make for progress- 
ive industriahsm, that it shall make larger provision for personal 
liberty and self-development. As speciahsed and regimented 
industry represents the direct economic service each must render 
to society, the demands of expanding personality are held to 
require that an increasing proportion of each man's time and 
energy shall be put at his disposal. 

§ II. No abstract considerations indeed, can be adduced to 
support an indefinite reduction of the work-day. As a high level 
of civilisation is attained in any community, the proportion 
of energy devoted to material, as compared with non-material 
commodities and services, will doubtless be reduced. But that 
does not necessarily imply a corresponding reduction of eco- 
nomic time and activity. For among economic goods them- 
selves, those which are wholly or mainly non-material will 



248 WORK AND WEALTH 

form an increasing proportion of the whole. A community like 
that of Great Britain, with a population declining in its growth, 
will tend to take a continually increasing share of its real income 
in the shape of intellectual, moral, ajsthetic, recreative, and 
other non-material services. These will absorb an ever-growing 
share of the productive energy of the people. This demand for 
the satisfaction of higher economic needs will be likely to put a 
check upon the tendency towards an illimitable reduction of the 
work-day. For most of these higher non-material goods do not 
admit the application of those economies of capitalist produc- 
tion available in the making of material goods. Take one ex- 
ample, that of education. Here is a service which will probably 
absorb a continually increasing percentage of the total time and 
energy devoted to economic services. The same is probably 
true of hygienic services. Though portions of these and other 
activities may pass from the economic into the non-economic 
sphere, being undertaken by individuals as private occupations, 
for their leisure, as public services they will certainly furnish 
employment to an increasing number of employees. 

Thus the claims of a growing progressive social organisation 
will impose some necessary limits upon the demands of the in- 
dividual for larger Hberty and leisure. 

There is, however, no final conflict between the claims of 
personal liberty and the social order. Even though the process 
of readjustment between the claims of industry and leisure 
should incline generally in favour of more leisure, with the prime 
purpose of nourishing more fully the private personality and 
affording larger scope for home life and recreation, society is 
not thereby the loser. For some of the finest and most profitable 
uses of leisure will consist of the voluntary rendering of social 
services of a non-economic order. I allude in particular to a 
fuller participation in the active functions of citizenship, a more 
intelligent interest in local and national politics, in local adminis- 
tration and in the numerous forms of voluntary association 
which are generally social in the services they render. More 
leisure is a prime essential of democratic government. There 
can be no really operative system of popular self-government 
so long as the bulk of the people do not possess the spare time 



THE DISTRIBUTION OF LEISURE 249 

and energy to equip themselves for effective participation in 
politics and to take a regular part in deliberative and admin- 
istrative work. This is equally applicable to other modes of 
corporate activity, the life of the churches, friendly societies, 
trade unions, cooperative societies, clubs, musical and educa- 
tional associations, which go to make up the social life and in- 
stitutions of a country. Leisure, demanded primarily in the 
interests of the individual for his personal enjoyment, will thus 
3deld rich nutriment to the organic life of society, because the 
individual will find himself drawn by the social needs and de- 
sires embedded in his personality to devote portions of his leisure 
to social activities which contribute to the commonwealth as 
surely as do the economic tasks imposed upon him in his daily 
industry. 



CHAPTER XVI 

THE RECONSTRUCTION OF INDUSTRY 

PART I 

CAPITAL AND LABOUR 

§ I. Since industry is a great cooperative process for the 
mutual aid of members of society, it is well that the fact should 
be held in the consciousness and will of individuals as clearly as 
possible. For this conscious realisation of the meaning of in- 
dustry will have a helpful influence on their intelligence and 
feehngs. 

Now there are general related tendencies in modern industry 
which are powerful obstacles to this reahsation of the social 
meaning of industry. 

The first is the growing subdivision of labour with the related 
expansion of markets. When a man made a watch or a pair of 
shoes and sold them to a neighbour, or known customer, his 
work had for him a distinct human significance. For, making 
the whole of a thing, he realised its nature and utility, while, 
seeing the man who wore his watch or shoes, he realised the 
human value of his work. Now he performs one of some ninety 
processes which go to make many watches, or he trims the heels 
of innumerable shoes. The other processes he cannot do, and 
does not accurately know how they are done. His separate con- 
tribution has no clear utiHty, and yet it solely occupies his 
attention. Not only does he thus lose grasp of the meaning of 
his work, but he has no opportunity of realising its consumptive 
utility. For he cannot know or care anything about the un- 
known person in some distant part of the world who shall wear 
the boots or watch he helped to make. The social sjTupathy of 
cooperative industry is thus atrophied by the conditions of his 
work. Division of labour, in its first intent, thus divides each 

250 



THE RECONSTRUCTION OF INDUSTRY 251 

worker into a section of a producer, and separates each set of pro- 
ducers from the consumers of their products. 

Though, therefore, this division of labour is in itself a finer 
mode of cooperation, it is not reaHsed as such by those who are 
subjected to it. 

§ 2. The second dehumanising and derationalising influence 
is the stress which the operations of modern industry lay on 
competition between trade and trade, business and business, 
worker and worker. No graver injury has been inflicted on the 
mind of man, in the name of science, than the prepotence which 
the early science of Political Economy assigned to the competi- 
tive and combative aspects of industrial life. To represent 
commerce between individuals and nations as a 'competitive 
system,' mainly dependent for its sucessful operation upon the 
absorption of each man in seeking his own gain, and in getting 
the better of others in his trade, was an error of the first magni- 
tude. Nor was this error sufficiently corrected by the quaUfying 
theory that from this pursuit by each of his separate gains the 
greatest good for all would somehow emerge. For, by laying the 
stress upon the competitive aspect of industry, this teaching 
stifled the growth of intellectual and moral sympathy between 
the various human centres of the industrial system, and im- 
paired the sense of human solidarity which, apart from its spirit- 
ual value, is the mainspring of efficient economic organisation. 
The presentation of industry as competition with attendant 
cooperation, instead of as cooperation with attendant competi- 
tion, has greatly contributed to the popular misunderstanding 
of commerce, ahke upon its domestic and its international 
scales.^ 

Competition, if defended as a socially useful method of in- 
dustry, must, Hke division of labour, be proved to contribute 
to cooperative ends. The general underlying assumption, that 
it will do so, we have seen to be false. Equally unjustified have 
been the accounts of actual industry which assume the general 

^ Adam Smith, by opening his Wealth of Nations with a dissertation upon the 
economy of division of labour, without explaining that this economy rests upon a 
prior conception of cooperation, unwittingly assisted to set English Political Econ- 
omy upon a wrong foundation. 



252 WORK AND WEALTH 

preva,lence of free competition. At all times the area and liberty 
of effective competition between business and business, worker 
and worker, have been limited, and tend in recent times to 
closer limitation. 

But if division of labour and competition, apart from a reali- 
sation of their cooperative values, are dehumanising and anti- 
social, so likewise is the growing anonymity of modern business. 
'Compagnie Anonyme' is the significant French name for a 
Jointstock Company with its unknown shareholders. But this 
depersonahsing process is everywhere inseparable from the mag- 
nitude and intricacy of modern businesses and modern markets. 
The capital belonging to a crowd of persons, who are strangers 
to one another, is massed into an effective productive aggregate, 
and is set to cooperate with masses of labour power whose owners 
are divorced from all direct contact, either with the owners of 
the tools and material, or with the purchasers of the product. 
An effective comradeship among large numbers of workers, dis- 
tributed over diverse processes and often severed widely in their 
places of work, is also difi&cult to maintain. A great modern 
business is in its structure less effectively human than was the 
small workshop which it displaced. One effect of this weaker 
humanity of the business, especially in the relations between 
capital and labour, employer and employee, has been to shift 
the sentimental attachment of the worker from his business to 
his trade-union. He is less a member of a business firm, serving 
some directly productive function, than a member of a labour- 
group extending over the area of a local or even a national 
trade. 

§ 3. This consideration brings to the front the antagonism be- 
tween capital and labour which has in modern times assumed ever 
graver dimensions and clearer consciousness. In considering 
the industrial system as an effective economic harmony it is not 
easy to determine whether the cooperative or the competitive 
forces are gaining ground. On the one hand, the competition 
between businesses in the same trade is in all great staple trades 
giving place to combinations, which not only unite the formerly 
conflicting businesses, but weld into close unity the capital of 
various related trades. Trusts, cartels, pools, conferences and 



THE RECONSTRUCTION OF INDUSTRY 253 

various experiments in federal compacts, for regulating output 
and selling prices, are everywhere engaged in substituting in- 
dustrial peace for war. Direct, and conscious harmony thus 
grows among formerly antagonistic capitalists and employers. 
The organisation of labour in the several trades, on the basis of 
a standard wage upheld by collective bargaining, marks a similar 
though less close harmony on the side of labour. 

But these advances towards conscious harmony among hitherto 
competing capitaHsts and labourers have been attended by a 
widening and intensification of the conscious antagonism between 
capital and labour within the several trades. Indeed, there are 
signs of a growing extension of combination for definitely hostile 
purposes, a ranging of capital on the one side, labour on the 
other, animated by a broad class consciousness which is new in 
the history of industry. 

In fact, it has all along been inevitable that the combinatory 
forces, which appeared to make for social solidarity in industry, 
should be brought up at what appears to be an impenetrable 
barrier, the class hostility between the owners of instruments 
of production and the workers. For this hostility is inherent in 
the distribution which evokes an Unproductive Surplus. So 
long as economic advantages permit some groups of capitaHsts, 
landowners and owners of organising power, to take for themselves 
large masses of unearned income, which might have gone to 
improve the conditions of the workers, had they been able to 
divert it into wages, no false platitudes about the harmony of 
capital and labour will secure industrial peace. 

For that harmony, as we have seen, only extends to the por- 
tion of the product distributed as costs. Now, the enormously 
increased productivity of modern industry has resulted in an 
increase of the size and relative importance of the surplus, and 
the large proportion of that surplus which is distributed un- 
productively in 'unearned' income represents a growing element 
of discord. 

This real divergence of economic interests between capital 
and labour is not then to be bridged by an economy of costs 
based upon the fact that, since each factor needs the other, it is 
interested in its proper remuneration. The complaints of the ex- 



254 WORK AND WEALTH 

isting system made by the workers not merely testify to a growing 
realisation of their economic weakness and a growing sensitive- 
ness to the inequitable modes of distribution. They are founded 
on the belief that upon the whole distribution is becoming more 
inequitable and more wasteful. For though the absolute share 
of the workers and the standard of real wages have been rising 
in most countries/ that rise has not been commensurate with 
the aggregate increase of wealth. In other words, a larger pro- 
portion of the total is passing into unproductive surplus, the 
factor of discord, a smaller into costs, the factor of harmony. 
If this is true, it impHes inevitably a worsening of the relations 
between capital and labour. For, so long as the owners of strong 
or scarce factors of production are rewarded according to their 
strength or scarcity, no peace is possible. The absorption of the 
unassimilated mass of wealth in a higher standard of Hfe for the 
workers and an enlargement and improvement of the public 
services is essential to secure the substance and the sense of 
social harmony in industry. 

§ 4. Leaving out for the moment the claim of the State for 
public services, this socially sound distribution of the product 
could only be achieved by a recasting of the governmental struc- 
ture of the Business, the Trade and Industry. Towards this 
governmental reform many different experiments are afoot. 
Various modifications of the ordinary wage-system, by way of 
bonuses upon individual and departmental efficiency of labour, 
are tried. More direct attempts to harmonise the interests of 
capital and labour within the business take shape in schemes of 
profit-sharing, which are sometimes carried further into the 
closer form of co-partnership, by which the workers own a share 
of the capital and, by virtue of this ownership may be admitted 
to a share of the administration. 

Regarded as methods of harmonising capital and labour in the 
business structure, most of these schemes appear to be of dubious 
worth, when we apply the proper test, viz, the abihty to divert 

^ Even this measure of working-class progress has been checked during the last 
decade. Recent statistics show that in Great Britain and in most other Western 
civilised countries, the rise of prices since 1896 and still more since 1905 has not been 
attended by a corresponding rise of wages, though profits and rate of interest have 
risen at least equally with prices. 



THE RECONSTRUCTION OF INDUSTRY 255 

into wages a portion of the unproductive surplus. For, though 
the stimulus of a ' bonus ' or a so-called ^ share of profit may in- 
crease the absolute wage of the workers in the business, if at the 
same time it proportionately increases the dividend or profit, it 
does ■nothing to reduce either the aggregate or the proportion 
of unproductive surplus. Moreover, if the increased produc- 
tivity of labour under such a stimulus is attended by enhanced 
intensification of effort in muscle or in nerve, with accompany- 
ing exhaustion, the total utility of the process to the worker may 
be a negative quantity, when the increased human cost of pro- 
duction has been set against the utility of the higher income, less 
advantageously consumed by reason of the exhaustion. Again, 
though many of these schemes expressly induce the workers to 
become small shareholders in the business, by applying the 
'bonus' or 'profit' to the purchase of shares, nowhere has this 
ownership by the workers been permitted to go so far as to give 
them any determinant voice in the administration of the business. 
Finally, many of these schemes by express intention, nearly all 
of them in actual tendency, weaken the attachment of the work- 

^ The ordinary profit-sharing scheme is vitiated, alike in theory and in practice, 
by the erroneous attribution of the concept 'profit' to that which is 'shared.' This 
is recognised at once when the experiment is properly described. For the ordinary 
profit-sharing scheme begins by laying down a normal rate of wages and of profits, 
based upon current facts of commerce. The provision for this standard wage and 
standard profit constitutes a first charge upon the takings of the business. Under 
normal conditions this would absorb the whole. But the workers are now told that, 
if they produce an additional income, they shall have in extra wages half of it. Now 
the whole of this additional income is due to the increased efiiciency of labour under 
the new stimulus. For if any more capital than before is required, provision for 
its payment at the normal rate is made before account is taken of the so-called 
profit that is shared. No more ability or effort of superintendence is required; in 
fact it is usually contended that the greater care taken by the workers renders less 
supervision necessary. Thus 'profit' is a misnomer for what is 'shared.' For this 
so-called 'profit' is entirely produced by greater intensity, skill or care on the part 
of labour. The fact that labour gets only half, and that only after the whole of what 
should be called the deferred ' wage-fund ' has served to meet any deficiency in the 
sum required to pay the normal dividends, explains why most of these schemes fail 
after a short trial. The proportion of the extra-product (evoked entirely by the 
increased stimulus applied to labour), that is actually paid to labour, is too small 
to maintain the efficiency of the stimulus. When these profit-sharing schemes suc- 
ceed, the success is nearly always traceable to the fact that in the original agreement, 
the benevolent employer has fixed his rate of interest or salary, or both, upon a 
lower scale than is current in the trade, so that the stimulus to labour is 
effective. 



256 WORK AND WEALTH 

ers in these businesses to their fellow-workers in other businesses 
belonging to the trade. So, whatever power proceeds from col- 
lective bargaining, for raising wages and improving the other 
conditions of employment, is diminished by these attempts to 
harmonise the capital and labour within the area of the single 
business. 

It is significant that nearly all the businesses where co-partner- 
ship shows signs of enduring success are legal monopolies, or 
are otherwise protected from free competition, so that the prices 
for the commodities or services they sell contain a considerable 
element of surplus. A fraction of this surplus is diverted from 
unproductive into productive purposes by a subsidy to wages. 
In the case of gas-works, the most conspicuous example, this 
process is furthered by the fact that legal restrictions upon 
dividends make what at first sight appears a pohcy of generosity 
to labour, costless to capital. 

§ 5. This criticism of the defects of these private experiments 
in industrial peace is reinforced by the experience of cooperative 
movements. Of the completely self-governing workshop or 
other business in which the whole body of the workers are sole 
owners of the whole capital they employ, there have been too few 
examples to enable any conclusion to be drawn. But nearly all 
the cases where the actual full administration of a business has 
been in the hands of those employed have been signal failures, 
save in rare instances where the possession of some skill or 
situation endowed with a scarcity value has assisted them. 
Experiments in the self-governing workshop make it evident 
that direct government by the workers in their capacity of pro- 
ducers is technically worse than government by the owners of the 
capital. The selection and the remuneration of abiHty of manage- 
ment are always found defective, and the employees are often 
unwilling to submit to proper disciphne, even when they have 
elected the persons who shall exercise it. A few successful 
experiments conducted in favourable circumstances, i. e., where 
a special market is available, or where only a section of the 
employees wield the power of administration, afford no con- 
siderable grounds of hope for this mode of cooperative settle- 
ment. 



THE RECONSTRUCTION OF INDUSTRY 257 

Thus there seems no ground for holding that any really satis- 
factory settlement of the conflicts between capital and labour 
can be got by private arrangements of a profit-sharing or a 
cooperative character. 

PART II 

PRODUCER AND CONSXJMER 

§ 6. Before considering more definitely 'socialistic' remedies, 
it is best, however, to open out the other conflict of interest, 
between producer and consumer. It is, of course, often held, 
even by those who recognise some reality in the opposition be- 
tween capital and labour, that the supposed opposition between 
producer and consumer has no real foundation. 

When producers compete, the gains of such competition in 
lower prices, better quaHty, etc., drop into the consumer's lap. 
Even where producers combine, or a single business holds the 
market, it is supposed that the monopoHst will generally find it 
most profitable to furnish a sound article at a moderate price. 

But this natural harmony between producer and consumer 
is subject to precisely the same quaHfication as that between 
capital and labour. Producer and consumer are necessary to 
one another, there is community of interests up to a limit. But 
beyond that Hmit there is an equally natural conflict. It is true 
that where producers compete freely prices are cut down for the 
consumer. But it is by no means true that he tends to get the 
cheapest goods which current arts of production render possible. 
For the expenses of competition, which are enormous, are de- 
frayed by him in the price he pays. Nor does free competition 
secure quality of product. It stimulates the arts of adulteration 
and deceit, and sets the cunning of the skilled producer against 
the simplicity of the unskilled purchaser. While, therefore, it 
may be urged that where competition of producers is effective, 
comparatively little 'surplus' passes into their hands, the waste 
of industrial power through the maintenance of excessive ma- 
chinery of production and of distribution is a grave social loss. 

Still less can it be admitted, that where combination has dis- 
placed competition, the consumer's interests are safe. On the 



258 WORK AND WEALTH 

contrary, it is recognised by all economists that where any 
effective monopoly is established, the selling prices to consumers 
will always be such as to secure a surplus profit to the producer. 
Prices may not always be as high as, or higher than, they would 
have been if a wasteful competition were maintained, but they 
will always be such as to extract a higher profit than is needed 
for the remuneration of capital and ability. Where the articles 
sold are necessaries or prime conveniences of life, and do not 
admit of effective substitutes, the prices will be indefinitely 
higher than under competition, and the conflict between pro- 
ducer and consumer more acute. Since under modern capi- 
talism an ever-increasing number of 'routine' requirements, 
covering the chief necessaries of large populations, are passing 
under some form or other of effective combination, it is clear 
that the problem of industrial peace must come to concern it- 
self more and more with the conflicts of producer and consumer. 
At present the consumer, at any rate in England, largely real- 
ises this conflict as a by-product of the struggle between capital 
and labour. Though the strikes and lock-outs, which express 
that struggle, disastrously affect his welfare, he is told that they 
are not his business, and he has no right to interfere. Where 
a settlement has taken place between capital and labour on a 
basis of higher wages or shorter hours, he finds the cost of this 
settlement is usually passed on to him in higher rates or prices. 
As joint-agreements between employers ' federations and trade 
unions become more common and more effective, as methods 
of conciliation and arbitration receive legal sanction and assist- 
ance, as wage-boards extend to new fields of industry, the false- 
hood and the social wrong which underlie the maxim 'caveat 
emptor^ become more manifest. The consumer will become in- 
creasingly more impotent to protect himself against the depre- 
dations of organised groups of producers. Indeed, experience 
proves that even where combinations are subject to the sanction 
and control of the State, which theoretically is dedicated to the 
service of the public as a whole, and might at least be expected to 
hold the balance even between producer and consumer, pro- 
ducers' interests are preferred. In the present policy of state 
control of Railways, and in the various schemes for the extension 



THE RECONSTRUCTION OF INDUSTRY 259 

of Wage Board legislation, there is no proper recognition of the 
interests of the consumer. An ill-devised lopsided Socialism is 
springing up, the Ukely result of which appears to be to set up 
groups of selected and preferred employments, whose higher 
wage-bill will in reahty be defrayed not out of rents, surplus 
profits or any other unearned income, but in large measure out 
of the reduction of real wages which arbitrary rises of consumers ' 
prices will impose upon other wage-earners. A flagrant instance 
of this defective social policy is suppHed by the recent arrange- 
ment by which the railways of this country have been empowered 
by Government to raise the wages of their employees by reducing 
the real wages of the general body of the wage-earners, who are 
called upon to bear a large part of the cost in the higher prices of 
commodities which follows upon the rise of railway rates. 

§ 7. Now, admitting, as we must, that a real divergence of 
interests between producers and consumers may and must arise 
in the ordinary course of industry, what remedy is possible? 

There is one large working-class movement which seems ex- 
pressly designed for the protection of the consuming public. I 
allude of course to the great Cooperative Movement on the 
Rochdale plan, in which the supreme control is vested in the 
consumers and their representatives. How far does this scheme 
represent a true reconcilement of producers' and consumers' 
interests? A very Httle investigation will show that, however 
excellent the other services it renders to the working-classes, its 
conduct of business affords no complete harmony of the interests 
of the several factors. 

For its entire structure and working are motived by the in- 
tention to absorb in real wages (by means of dividends on pur- 
chases) the 'profits' to which in ordinary trade most of the un- 
productive surplus seems to adhere. By dispensing with the 
profits of various grades of middlemen, by reducing the expenses 
of management, by saving most of the costs of advertising and 
other incidental costs of distribution, much surplus is diverted 
into real wages. But, regarding this scheme from the stand- 
point which immediately concerns us, as a reconcilement of 
capital and labour within the business, we find an obvious defect. 
There is nothing in the theory, or commonly in the practice, oi 



26o WORK AND WEALTH 

the cooperative store or workshop, to evoke from the employees 
any special interest in its successful conduct. If they are mem- 
bers, they do indeed get in this capacity a gain equal to that en- 
joyed by other members not employed in the business. But, as 
employees, they have no voice in the administration and no 
share in the gains. Where, as in the Scottish Wholesale, a profit-! 
sharing scheme is attached, this scheme is exposed to the same- 
criticism that we have applied to other profit-sharing schemes. 
There is no security afforded by this cooperative form of busi- 
ness for the full reconcilement of the claims of capital and labour 
within the business. But, after all, it might be objected, that 
does not really matter. For, if the worker in a cooperative mill 
or store is also a cooperative consumer, he will, as such, enjoy 
a collective gain as great as he could hope to gain if he were 
assigned a special lien upon the surplus that emerged from the 
successful conduct of the particular business in which he worked. 
It will be his intelligent interest, as consumer, to help to elect 
and to maintain an effective administration in all the various 
productive and distributive businesses from which are derived 
the half-yearly dividend on purchases which he receives. 

Now if the working-classes of the nation made all their pur- 
chases through cooperative stores, and if these stores, in their 
turn, bought what they sell exclusively from cooperative pro- 
ductive businesses, and if all working-class consumers were em- 
ployed in these cooperative businesses, a solution of the social 
problem on cooperative lines might be plausible. For any surplus 
made at any stage would flow in the ordinary course of events 
into consumers ' dividends, forming an addition to the real wages 
which they earned as producers. Nor need it matter that the 
cooperative consumers were not full owners of all the capital 
they needed to employ, provided they could borrow it in a free 
market. If the agricultural and mining lands, whose produce 
they required, did not belong to them, there would indeed remain 
a large leakage in the shape of economic rent. But the nature 
of the so-called land monopoly is not such as to prevent the 
cooperative consumers from taking in real wages the great bulk 
of the surplus which otherwise would have gone to capitalists 
and entrepreneurs in unearned income. 



THE RECONSTRUCTION OF INDUSTRY 261 

Unfortunately, large and important as is this Cooperative 
Movement, it falls far short of the full conditions here laid down. 
The majority of the wage-earners are not members of Coopera- 
tive Stores: those who are members only purchase certain sorts 
of goods at the store: owing to the slighter development of 
productive cooperation, a large proportion of the goods sold in 
the stores are bought in the ordinary markets: comparatively 
few of the cooperative consumers are employed in coopera- 
tive businesses. There are large tracts of industry, such as 
agriculture, mining, transport, building,^ metal- working and 
machine-making, which the Cooperative Movement has hardly 
touched, nor are there signs of any rapid extension in these 
fields of enterprise. In point of fact, cooperation has almost 
entirely confined itself to trades and industries where com- 
petition is normally free, and where the object of cooperation 
has rather been to save and secure as 'divi' certain ordinary 
expenses of competitive businesses than to invade the strong- 
holds of highly profitable capitaHsm where unearned surpluses 
are large. While, then, a considerable proportion of the total 
working-class income is expended upon articles bought in the 
stores ^ and valuable economies are affected, only a small pro- 
portion of the eleven millions paid in dividends and interest to 
consumers can be taken to represent unproductive surplus 
absorbed into wages. While, therefore, the advance of the 
Cooperative Movement in recent years, alike in membership, 
in volume of trade and in profits, has been rapid, a careful 
examination of the field of cooperative progress does not indicate 
any solution of the main problem of distribution along these 
lines. The areas of really profitable private enterprise are to all 
appearance unassailable by the Cooperative Movement. 

§ 8. But we find within the Cooperative Movement some 
experiences which shed light upon the problem of business ad- 
ministration. If the truly social nature of the 'business' is to be 
expressed in its government, the Rochdale plan, upon which the 

^ Building Societies are only in a very restricted sense cooperative. 

" In 1909 the aggregate sales at the Retail Stores amounted to £70, 423,359, or 
about 10% of the working-class income, and the profit (including interest paid on 
shares) was £10,851,739. 



262 WORK AND WEALTH 

main cooperative structure has been erected, contributes an 
element of really vital importance. It asserts that a business 
exists, not to furnish profit to the capitalist employer or wages 
to the workers, but commodities to consumers. The consumer, 
being the end and furnishing by his purchase-power the stimulus, 
should hold the reins of government. He is the owner, he shall 
rule, he shall receive the whole gain. This is a complete reversal 
of the ordinary idea of the business world, to which a business 
exists to secure profits to business men, the worker and the 
market (consumer) being mere instruments in profit-making. 
Hardly less does it counterwork the ordinary ideas and feehngs 
of the working-man, for whom the business exists merely as a 
means of remunerative employment, and whose sole idea of re- 
form is to secure in higher wages and improved conditions of 
labour as much of the profits as possible. To neither does it 
for one moment seem reasonable that the consumer should 
interfere in the administration of the business, or take any share 
in its gains, save such as must come to him in the ordinary course 
of trade. 

Thus the success of the Rochdale plan is a dramatic assertion 
of a revolutionary idea in the organisation of business. It is 
proved that large numbers of routine businesses can be conducted 
by and for consumers. But it cannot be assumed that this con- 
centration of the meaning, the utihty and the government of 
industry in the consumer, has complete validity. It may be 
called consumers' socialism, as distinguished from the sort of 
producers' socialism which prevails among trade unionists. 
As the latter aims at controlling businesses in order to divert 
directly into wages all surplus profit, so the former aims at con- 
trolling businesses in order to divert the same fund into con- 
sumers' dividends. Now, if the producers and the consumers 
of the goods produced in any business were the same, it might 
seem a matter of indifference in which capacity they took the 
gain. But they are not. The workers in a particular mill or 
store buy for their own use a very minute fraction of the goods 
there produced. Even if the workers, by means of their unions 
or their cooperative societies, could capture the whole industrial 
machinery, it would still remain a matter of importance how far 



THE RECONSTRUCTION OF INDUSTRY 263 

they paid themselves in higher wages, how far in consumers' 
dividends. For unless their claims as producers and as con- 
sumers were properly adjusted in the control of the several 
businesses, there would be Uttle or nothing to distribute. 

Few thoughtful cooperators will claim finality and all-suffi- 
ciency for the cooperative idea as embodied in the present 
movement. 

The persistent struggles in the movement itself to temper the 
absolutism of the consumer by the assertion of cooperative em- 
ployees to a higher rate of pay than obtains in the outside labour 
market and to a share of the profits, is an interesting commentary 
on the problem of social administration of the business. It is 
widely felt that the view that a business exists in order to supply 
utilities to consumers is defective as a principle of business govern- 
ment. The claim of the owners of the factors of production em- 
ployed in the business to some voice in the conduct of that 
business is not lightly to be set aside by asserting that the factors 
of production are mere means to the consumer's end. If the 
consumers themselves own the share-capital or borrow other 
capital at market rates with good security, the issue of the con- 
trol of capital need not arise. But the labour employed in a co- 
operative business has a human interest in the conduct of the 
business separate from that of the consumers. In virtue of this 
human interest, these workers impugn the doctrine that the busi- 
ness exists solely for the consumers, and insist that their human 
interest shall be adequately represented in the conduct of the 
business and the distribution of its gains. 

§ 9. Those who have followed and accept the general princi- 
ples of our analysis of industry into human costs of produc- 
tion and human utiHties of consumption will be disposed a 
priori to accept the view that, in the equitable control of every 
business, the interests of the worker as well as of the consumers 
should be represented. Regarded from the social standpoint, it 
is as important that good conditions of employment shall prevail 
in a business, as that good articles shall be furnished cheaply 
to consumers. Nor, as we recognise, can we assume that an 
enlightened business government by consumers, any more than 
by capitaHsts, will necessarily secure these good conditions for 



264 WORK AND WEALTH 

employees. Definite and not inconsiderable instances of sweating 
inside the cooperative movement itself testify to the reality of 
this need. But it is urged not merely on grounds of equity, as a 
protection against possible abuses of power by consumers or 
their representatives, but on grounds of sound economy. For 
if it be admitted that the employees in a cooperative business 
have a special human interest, it is idle to argue that it is socially 
advantageous to leave this interest without representation in 
the conduct of the business. 

The cooperation which assigns all power and all gain to the 
consumer is in fact vitiated by the same social fallacy as the 
syndicalism which would assign the same monopoly to the em- 
ployee, or as the capitahsm which does assign it to the profit- 
monger. Equity and economy alike demand that the interests 
of all three shall be adequately represented. Social remuneration 
in its application to the business unit must proceed upon this 
fundamental principle. A business consists of capital, labour, 
and the market. To place unlimited control in the hands of any 
of those factors is wasteful and dangerous. The human defects 
of uncontrolled capitalism have been made sufficiently apparent. 
Any adequate experiment in uncontrolled trade-unionism or in 
syndicalism would disclose similar abuses. The idea of the 
miners running the mine, or the factory-hands the factory, the 
railway workers the railway, is not so much unsound in the 
sense that they must fail to run it properly. For though unlikely, 
it is at least conceivable that they might have enough intelli- 
gence and character to buy competent managers and carry out 
their detailed instructions. Its fundamental vice consists in 
ignoring the factor of the market, and in building up a number of 
separate industrial structures in which the consumers' interests 
are unrepresented. It may appear plausible to argue that the 
control of each process of production should be left to the pro- 
ducers who may be presumed to know it best. But it becomes 
evident, even to the syndicalist, that no business could be con- 
ducted upon this policy unmodified. No housebuilding could 
proceed, if the plasterers, the bricklayers, the carpenters, had 
each full power to determine when they would work, at what 
pace they would work, and what remuneration they should exact. 



THE RECONSTRUCTION OF INDUSTRY 265 

There must be a definite arrangement between the groups of 
workers in the several processes within each business, which will 
qualify the control of plastering by the plasterers, bricklaying 
by the bricklayers, by a wider control that represents the common 
interests of the business. Not merely does the syndicalist idea 
recognise this cooperation of the processes within a business, 
but it extends the cooperative character of the control to the 
trade as a whole. Under syndicalism the building trade would 
not be broken into a number of businesses in each of which 
would be made a separate arrangement between the carpenters, 
bricklayers, etc., employed in it. The arrangements as to hours 
and pace and remuneration, etc., would be determined by rep- 
resentatives of the various crafts on a trade basis, and would be 
the same for all businesses and all jobs. But the organisation of 
producers could not stop there. Each trade could no more be 
entirely self-governing than each business or each process in a 
business. The trade-organisation of the miners could not, hav- 
ing regard to the interests and needs of other trades, be safely 
entrusted wdth the absolute control of mining, or the railway 
workers with the absolute control of the railways. There must 
be some power to prevent the miners reducing their amount of 
work and their output to an extent which will cripple the other 
trades which need coal, and to compel the railway workers to 
afford reasonable facilities of transport on reasonable terms to 
shippers and travellers. For, otherwise, there would be substi- 
tuted for the conflict of capital and labour within each business 
or each trade, a conflict of trades, each striving to do as little 
and to get as much as possible out of the aggregate wealth. Nor 
can it be assumed that the intelligent self-interest or social 
sympathy of the miners, or railwaymen, or other trades, would 
be adequate safeguards against such abuses. This is evident 
when we bear in mind the central concrete problem before us, 
the social distribution and utilisation of the surplus. For it will 
be technically possible for any strongly-placed special group of 
workers, such as the miners or railway workers, to take to them- 
selves, in remuneration or in leisure, an excessive proportion of 
this surplus, leaving very Httle for any other group of workers. 
The guild-feeling, upon which syndicalism mainly relies, not 



266 WORK AND WEALTH 

merely supplies no safeguard against this abuse of power, but 
would almost certainly evoke it, unless a potent control, rep- 
resenting industry in general, were established over the indi- 
vidual trades or guilds. Experience of cases where local trade- 
unions are occasionally placed in a position of tyranny shows 
that they will play for their own hand with a disregard to the 
interests of their fellow-workers in other trades as callous as is 
displayed by any trust of capitahsts. Assuming, then, that it 
were possible for guild-societies to develop to the point that the 
workers in each trade were in possession of all the instruments 
of production, and were able to conduct the processes efficiently, 
the problem of distributing the 'surplus' among the several 
trades or guilds, in the shape of pay or leisure, would still re- 
main unsolved. Among the groups of producers, in a word, there 
would remain divergencies of interest, which would be incapable, 
upon a producers' policy, of solution. Syndicalists, confronted 
with this phase of their problem, plunge into vague assurances 
that the process of agreement which had taken place between the 
workers in the several processes and the several businesses in a 
trade, could be extended to the workers grouped in the larger 
trade-units, and that the real solidarity of working-class interests 
would somehow instinctively express itself in equitable and 
durable arrangements. But the moment one passes from the 
region of phrases to that of concrete facts the difficulties thicken. 
An elected council of national workers would have to devise 
some practicable method of comparing units of railway service 
with units of mining, bricklaying, doctoring, acting, waiting, etc., 
so as to apply to each productive process the support and stimu- 
lus needed to induce the workers engaged in it to do their share 
of work and to receive their share of wealth. No mere time 
basis for such competition would be practicable. It would be 
necessary to induce a body of labour and capital to apply itself 
to each process of each occupation, sufficient in quantity and in 
efficiency to supply the requirements of the working community 
as a whole, and to devise a mode of remuneration, or distribution 
of products, which would satisfy this requirement. 

It is quite evident that all this adjustment of the claims and 
needs of individuals within a process in a business, of businesses 



THE RECONSTRUCTION OF INDUSTRY 267 

in a trade, of trades in industry, would need an elaborate liierachy 
of representative government, with a supreme legislature and 
executive, whose will must over-rule the will of the national or 
local groups within the several trades, as to the quantity and 
method of work to be done in each concrete process, and as to 
the remuneration of each sort of work. In other words, society, 
as a whole, would have imposed its final control upon each 
group of workers, diminishing to that extent their power to de- 
termine the conditions under which they would work, and their 
effective separate ownership of the instruments of production. 
The ideal of the self-governing mine, or factory, or railway, 
would thus be over-ridden by the superior ideal of a self-governing 
society. But that self-government by society, the supreme leg- 
islation of industry, could not perform its work by confining 
its attention to the various productive processes, and the busi- 
nesses and trades in which they were conducted. It would be 
compelled to study the wants and will of the consumers, or, if it 
be preferred, of the workers in. their capacity of consumers. For, 
only by the study of the consumer, or the market, could the work 
of adjusting the apphcation of productive power at the different 
productive points, and the process of remuneration by which 
that distribution was achieved, possibly be accompHshed. Thus, 
although the whole body of this syndicalist legislature might 
have been elected to represent the interests of separate groups 
of producers, or trades, it would be compelled to give equal atten- 
tion to the wants and the will of the consuming pubhc. But it 
would discover that, just in proportion as it was accurately 
representative of the separate interests of groups of producers, 
to that extent was it disqualified for safeguarding the interests 
of the consuming pubhc, which in each concrete problem would 
be liable to cut across the interests of special groups of producers. 
In other words, it would be impossible properly to regulate the 
railway service without direct regard to the interests of the 
travelling and trading public as a whole, to regulate the mining 
industry without regard to the local, seasonal and other needs 
of coal consumers. But these consumers' interests could not be 
properly considered in a legislature chosen entirely by separate 
groups of producers, with the object of promoting the special in- 



268 WORK AND WEALTH 

terests of these groups. The impossibility of syndicalism thus 
turns upon ignoring in the control of business the will of the con- 
sumer. 

§ lo. Thus we are compelled to recognise that in a sound 
social organisation of the industrial system, and of each part of 
it, the business, the trade, (or the group of trades) and the con- 
sumer or market must be introduced as integral factors of 
government. We cannot content ourselves with the view that 
a producer, or any composite body of producers, is necessarily 
impelled by its self-interest to safeguard the interests of the 
consumer. Nor can the consumer safeguard his interests ade- 
quately through the guidance or stimulus he brings to bear 
through his separate individual acts of demand. He is incapable 
of protecting himself properly, even when producers are not 
combined but are competing. When they are combined he is 
helpless. The cleavages of immediate economic interest be- 
tween the worker and the consumer are so numerous that no 
abstract identity of interests in a community where all consumers 
were also workers, all parasites being excluded, would suffice to 
secure the requisite economy and harmony. This economy and 
harmony can only be secured by giving the consumer a direct 
voice in the government of industry. 

SyndicaKsm is in large measure a reaction against forms of 
state sociaHsm which are vitiated by a defect similar to that 
which we find in the Rochdale cooperative plan. So far as the 
pubhc services are honestly and efficiently administered by 
public officials, the public which these officials represent is pri- 
marily the citizen in his capacity of consumer. The municipal 
services are run, either to give him cheap transport or lighting 
of sound standard quality, or else to enable him to get police, 
street-cleaning or some other service which he could not other- 
wise have got. But this bureaucratic socialism is apt to neglect 
or to ignore the interests of its employees, and to deny them any 
influence in determining the conditions of their employment, 
other than that which they can bring to bear as citizen-consumers. 
Thus are found cases where public departments, or the contrac- 
tors they employ, are allowed to pay wages so low or to offer 
such irregular employment, as to contribute to that inefficiency 



THE RECONSTRUCTION OF INDUSTRY 269 

and destitution for which the same public is subsequently called 
upon to make financial and administrative provision. This is an 
inevitable defect of a one-sided or consumers' sociaHsm. Nor 
is it likely to be remedied by any general perfunctory recognition 
of the duty of the pubUc employer to observe standard conditions. 
For in most cases pubHc employment will, by virtue of its mono- 
polistic character, contain features that have no precise analogy 
in the outside business world, so that some separate method of 
determining the application of standard conditions is necessary. 
Unless that method admits direct representation of the interests 
of the employees, there can be no sufficient security that these 
interests shall receive proper consideration. This is not a demand 
that the employees shall ' interfere ' with the public management, 
or 'dictate' the terms of their employment. On the contrary, 
it is clear that the official managers must, in the ordinary course 
of business, secure the execution of their orders. But, consider- 
ing that their standpoint must always be biassed towards a 
special interpretation of the public interest in the sense of effi- 
ciency and economy of a particular output, this narrower pubUc 
interest must be checked by reference to a wider public interest 
in which the human costs of production shall be represented. 
An accumulating weight of recent experience in various countries 
makes it evident that state-socialism must fail unless adequate 
provision is made for safeguarding the interest of particular 
groups of pubHc employees. This safeguard cannot, of course, be 
given by any mere concession of the right of combination and 
of collective bargaining. For while collective bargaining may 
enable the employees to secure fair terms where they are dealing 
with competing private businesses, it cannot where the sole 
employer is the State or Municipality. The latter is technically 
able to impose its terms upon any group of workers who are 
specialised for the work it offers. Recognition of the Union, and 
an admission by the management of the right of union-officials 
to consultation and discussion of conditions of employment, do 
not really furnish any basis of settlement, though they may often 
ease a difficulty and remove misunderstanding. What is required 
is a statutory right of appeal to a public authority, outside of and 
independent of the particular department, competent to take that 



270 WORK AND WEALTH 

wider view of public interest from which the departmental public 
official is, by the necessity of his situation, precluded. That 
claim of the public employee is frequently misunderstood. It 
does not arise from any real or pretended opposition of interests 
between the public and a group of its employees, and a claim on 
the part of the latter that the public shall make some concession 
or sacrifice to their particular group interest. There is no such 
real opposition of interests. The valid claim for an appeal from 
the arbitrary decisions of the public departmental managers is 
based upon the fact that the latter are disqualified for a full im- 
partial view of the public interest, so far as that public interest 
is affected by the conditions of employment of the employees 
under them. The fact that the employees are often likely to 
make unreasonable demands and to claim in wages, hours and 
other conditions, an excessive share of the public revenue, does 
not affect the validity of this contention. For practical conven- 
ience official departmentalism exists. But this departmentalism 
involves a business management essentially defective from the 
standpoint of public welfare, inasmuch as it tends to depreciate 
or overlook the interest which the public has in the total welfare 
of that section of the public which is in its direct employment. 
§ II. Of course, in treating the issue of a public business as if 
it consisted simply in reconciling the immediate interests of the 
consuming public with those of the public employees, we have 
intentionally excluded another view which may often be more 
important. State socialism may be run primarily in the interests, 
neither of the citizen-consumer nor of the employer, but of the 
bureaucracy, who here occupy the place of the capitalist-managers 
under private enterprise. The ojQ&cial may be held to be naturally 
disposed to magnify his office and to abuse any power which can 
be made to subserve his personal or class interests. Practical 
permanency of tenure of liis office, and the special knowledge 
which it brings, enable him, with safety, either to neglect his 
public duties, or to encroach upon the liberties of citizens, accord- 
ing as he is lethargic or self-assertive. He may squander the 
resources of the public upon ill-considered projects, or in serving 
the private interests of his friends. Or, he may practice a tyran- 
nical or a niggardly pohcy towards his employees, not through 



THE RECONSTRUCTION OF INDUSTRY 271 

a narrow interpretation of public economy, but from sheer care- 
lessness or from defective sympathy. These charges against 
ofHcialism are too familiar to need expansion here. However 
carefully the public service is recruited, such abuses will be liable 
frequently to occur, and the structure of Government should be 
such as to supply effective checks and remedies. 



CHAPTER XVII 

THE NATION AND THE WORLD 

§ I. We have examined the chief defects in the structure of a 
business and a trade, regarded in the Hght of instruments of 
human welfare, and we have considered some of the remedies, 
appHed sometimes for purposes of distinctively industrial econ- 
omy, sometimes as devices of social therapeutics. 

There remains, however, one other mode of economic antag- 
onism deserving of consideration. Until modern times a nation 
was to all intents and purposes not only a political but an eco- 
nomic area, in the sense that almost all trade and other economic 
relations were confined within the national limit. The small 
dimensions of foreign, as compared with domestic trade, and 
the nature of that trade, confined to articles not produced at 
home, had little tendency to generate a feeUng of international 
rivalry. Foreign trade was almost wholly complementary and 
not competitive. With the modem changes, which have altered 
this condition and made nations appear to be hostile competitors 
in world commerce, we are all familiar. The development of 
capitalist production to a common level and along similar lines 
in a number of Western nations, the tendency towards an in- 
crease of output of manufactured goods at a price exceeding the 
demands of the existing markets, the consequent invasion of the 
markets of each industrial country by the goods of other coun- 
tries, and the growing competition of the groups of traders in 
each nation to secure and develop new markets in the back- 
ward countries, with the assistance of the physical and military 
forces of their respective governments, have imposed upon the 
popular mind a powerful impression of economic opposition 
between nations. No falser and more disastrous delusion pre- 
vails in our time. The only facts which seem to give support to 
it are the Tariffs, Commercial Treaties and the occasional uses of 
poHtical pressure and military force by States for the benefit of 

272 



THE NATION AND THE WORLD 273 

financiers, investors, traders or settlers belonging to their na- 
tionality. This intervention of Governments for the supposed 
advantage of their citizens has had the unfortunate effect of 
presenting nations in the wholly false position of rival business 
firms. Groups of private manufacturers, traders and financiers, 
using their government to secure their private profitable ends, 
have thus produced grave conflicts of international policy. The 
worst instrument of this antagonism, because the most obvious 
and the most vexatious, is the protective Tariff, and the most 
singular proof of its derationalising efficacy is found in the con- 
duct of our recent fiscal controversy. The fiercest fight in all 
that controversy has raged round the relative size, growth and 
profitable character of the foreign trade of Great Britain, Ger- 
many, America, etc. These States are actually treated, not 
merely by Protectionists but by many Free Traders, as if they 
were great trading firms, engaged in struggling against one 
another for the exclusive possession of some limited economic 
territory, the success of one being attended by a loss to the 
others. Now, Great Britain, Germany and America are not 
economic entities at all; they are not engaged in world commerce, 
either as competitors or as cooperators; the respective advances 
or declines made by certain groups of merchants within their 
confines in overseas trade have no net national significance at all. 
Finally, overseas trade, by itself, furnishes no index of the collect- 
ive prosperity of each nation. 

§ 2. The whole presentation of the case under the head of 
Nations is irrelevant and deceptive, conveying, as it is designed 
to do, the false suggestion that Englishmen, grouped together 
as a people, are somehow competing with Germans grouped 
together as another nation, and Americans as a third nation. 
Now no such collective competition exists at all. So far as trade 
involves competition, that competition takes place, not between 
nations, but between trading firms, and it is much keener and 
more persistent between trading firms belonging to the same 
nation than between those belonging to different nations. Bir- 
mingham or Sheffield firms compete with one another for machin- 
ery and metal contracts far more fiercely than they compete with 
Germans or Americans in the same trade, and so it is in every 



274 WORK AND WEALTH 

other industry. The production of import and export figures, 
and of balances of trade, under national headings, is a mis- 
chievous pandering to the most dangerous delusion of the age. 
It has done more than anything else to hide the great and benef- 
icent truth, that the harmony and soHdarity of economic in- 
terests among mankind have at last definitely transcended 
national limits, and are rapidly binding members of different 
nations in an ever-growing network of cooperation. Within the 
last generation a more solid and abiding foundation for this 
cooperation than ordinary exchange of goods has been laid in the 
shape of international finance. Though certain dangerous 
abuses have attended its beginnings, this cooperation of the 
citizens of various countries in business enterprises in all parts 
of the world is the most potent of forces making for peace and 
progress. More rapidly than is commonly conceived, it is bring- 
ing into existence a single economic world-state with an order 
and a government which are hardly the less authoritative be- 
cause, as yet, they possess a slender political support. That 
economic world-state consists of all that huge area of indus- 
trially developed countries in regular and steady intercourse, 
linked to one another by systems of railroads and steamship 
routes, by postal and telegraphic services, administered by com- 
mon arrangements, by regular commerce, common markets and 
reHable modes of monetary payment, and by partnerships of 
capital and labour in common business transactions. 

§ 3 . The actuality of this world-system has preceded its con- 
scious realisation. But the growing fact is educating the idea 
and the accompanying sentiment in the minds of the more en- 
lightened members of all civilised nations. We hear more of 
internationalism from the side of labour. But, in point of fact, 
the corporate unity of labour lags far behind that of capital. 
For the mobility of capital is much greater, and its distribution 
is far better organised. But, as the financial machinery for the 
collection and distribution of industrial power over the whole 
economic world is further perfected and unified, it will be at- 
tended by a loosening of those local and national bonds which 
have hitherto limited the free movement of labour. As the 
centre of gravity in the economic system shifts from land, which 



THE NATION AND THE WORLD 275 

is immovable, to money, the most mobile of economic factors, 
so the old local attachment which kept most labour fastened to 
some small plot of the earth, its native village, will yield place to 
liberty of movement accommodated to the needs and opportuni- 
ties of modern profitable business. Within the Hmits of each 
country the increased mobility has long been evident: it has 
helped to break up parochialism and provinciaHsm of ideas and 
feelings, and to evolve a stronger sense of national unity. But 
there is to be no halting at the limits of the nation. Already 
large forces of international labour exist. Not merely do vast 
numbers of workers migrate with increased ease from Belgium 
into France, from Russia into the United States, from Germany 
into South America, for settlement in these countries, but large 
bodies of wage-earners are being organised as a cosmopolitan 
labour force following the currents of industrial development 
about the world. So far as unskilled labour is concerned, large 
tracts of China, India and the Straits Settlements, form a re- 
cruiting ground in Asia; while Italy and Austro-Hungary furnish 
a large European contingent. But not less significant are the 
higher ranks of cosmopolitan labour, the British and American 
managefs, overseers and workmen in the engineering, railroad, 
electrical and mining industries, who to-day are moving so 
freely over the newly developing countries of three continents, 
placing their business and technical ability at the service of the 
economic world. The new movements in the economic develop- 
ment of Asia and of South America will enormously accelerate 
this free flow of business ability and technical skill from the 
more advanced Western nations over the relatively backward 
countries, and will also bring into closer cooperation at a larger 
number of points the capital and management of Western 
peoples. 

My object in referring to these concrete economic movements 
of our time is to illustrate the powerful tendencies which are 
counteracting the old false realisation of industry in terms of 
human competition and antagonism, and are making for a con- 
scious recognition of its cooperative and harmonious character. 



CHAPTER XVIII 

SOCIAL HARMONY IN ECONOMIC LIFE 

§ I. A brief summary of the actual tendencies towards har- 
mony and discord at present visible in the economic world may 
be conveniently presented here. 

We see among the fundamental industries the transformation 
of the structure of the single business; large numbers of Httle 
rivulets of savings from innumerable separate personal sources 
merging to form a single body of effective capital ; large numbers 
of workers closely welded into a single body of effective labour- 
power; both operating in normal harmony under the direction 
of a common central management, and engaged in the continuous 
work of turning out a product, the price of which forms the com- 
mon income alike for capitalists and workers. So far as that 
portion of the dividend is concerned which forms the economically 
necessary costs of these masses of capital and labour, there exists 
a harmony of interests between the two groups of claimants, 
which is more clearly recognised with every improvement of the 
general standard of intelligence and information. In most 
businesses that common area of interest covers by far the larger 
part of the business dividend. Where a surplus emerges in excess 
of these economic costs, an initial discord arises between the 
claims of the capital and labour. But this discord may be re- 
solved in two ways, in each of which important experiments, 
attended by a growing measure of success, are being carried on. 
Large patches of the area of discord are being reclaimed to order 
by the modern State, whose policy is more and more directed 
to absorbing by taxation, and applying to the use of the com- 
munity, great shares of these business surpluses, as they emerge 
in incomes and inherited properties. As regards the surplus 
which is not so absorbed, the grouped forces of capital and labour 
within the business are constantly engaged in seeking to discover 
pacific and equitable modes of division which shall reconcile, or 

276 



SOCIAL HARMONY IN ECONOMIC LIFE 277 

at least mitigate, the remaining opposition. Though this re- 
mains at present the sharpest field of conflict, pacific forces are 
making more gain than perhaps appears upon the surface. Some 
of those industries, where such discords have been most rife and 
most wasteful, have been taken over by the State or the Mu- 
nicipality. In these cases such quarrels as may still arise in 
connection with the claims of labour admit of settlement by 
other means than economic force. In others, the State inter- 
venes on behalf of pubHc order by assisting to promote processes 
of arbitration or conciliation. In others, again, the organisation 
of the forces of capital on the one hand, labour on the other, over 
the whole range of businesses comprising a national trade, has 
tended to make actual conflicts rarer, and presents a machinery 
capable of apphcation to pacific settlements. Grave as are the 
defects in the working of this machinery of Joint Boards, Sliding 
Scales, Conciliation and the like, and terrible as are the injuries 
these defects cause, they ought not to blind us to a recognition 
of the fact that the number of actual conflicts between capital 
and labour is constantly diminishing. 

§ 2. This truth is better realised when we turn from the struc- 
ture of the business to that of the trade or market. There, 
though keen and even cut-throat competition still survives, the 
tendency is more and more, especially in the great staple in- 
dustries where large aggregates of capital and labour are em- 
ployed, towards cooperation, combination and trade agreements. 
If, for the moment, we ignore the dangers which such combina- 
tions often threaten to consumers, and regard them from the stand- 
point of trade structure, we cannot fail to recognise the enormous 
advance they represent in the cause of industrial harmony. For 
whatever the degree of unity attained by such a Trust, Cartel, 
Conference, Trade Agreement, Federation, it means pro tanto 
a saving of the energy of capital and labour formerly expended 
upon conflict, and a concentration of the thoughts and purposes 
of business men upon the best performance of the useful functions 
of production which constitute the social value of their trade. 
So long as a trade remains in a distinctively competitive con- 
dition, an enormous part of the actual energy is consumed not 
in production but in warfare. The thoughts and wills of the con- 



278 WORK AND WEALTH 

trollers of the several businesses are deflected from the economical 
fulfilment of their social function to conscious rivalry. Neither 
the capital nor the labour in each several business enjoys a 
reasonable measure of security; and not only the profits but the 
wages of each firm are jeopardised by the success of a stronger 
competing firm. The growing displacement of this condition of 
a trade by the principle and practice of combination is perhaps 
the most conspicuous movement towards industrial peace. I 
am aware that, in itself, this concentration and combination of 
businesses within a trade afford no sure settlement for the differ- 
ences between capital and labour. They may even aggravate 
those differences in several ways. For, in the first place, such 
combinations are expressly and chiefly designed to produce a 
larger quantity of surplus profits, thus stimulating conflict by 
offering a larger object of attack to labour. In the second place, 
such combinations, if at all complete, may prove more clearly than 
in any other way the superiority of organised capital over or- 
ganised labour in the determination of wages and conditions 
of labour. Finally, private ownership of natural resources, 
producing for its owners economic rent, remains an unsolved 
antagonism. Though the extent to which the 'surplus', which 
monopohstic, protected or otherwise well-placed businesses 
obtain, as open or concealed 'rent', is not capable of exact 
estimate, many, if not most, profitable businesses derive some of 
their surplus from the possession or control of natural resources. 
Such natural resources are to all intents and purposes capital, so 
far as relates to issues of conflict between capital and labour. 
The amount and possibly the proportion of surplus (taking the 
whole industrial world into consideration) which is plain or dis- 
guised rent, is probably upon the increase. Even in Great 
Britain, though aggregate rents do not keep pace with profits and 
other incomes derived from business capital, they probably form 
an increasing proportion of that income which, according to our 
definition, ranks as 'unproductive surplus.' Though these 
rents, hke other 'unproductive surplus,' could be advantageously 
diverted into wages on the one hand, public revenue upon the 
other, they are kept on the side of capital by the fufl force of 
combination. 



SOCIAL HARMONY IN ECONOMIC LIFE 279 

Thus the labour in any trade may be confronted by a larger 
body of wealth which it would like to secure for higher wages, 
while at the same time it finds itself less able to achieve this object. 

§ 3. Equally sharp may be the antagonism of interests set up 
between such a combine and the general body of consumers, by 
means of the control of prices which the former possesses. For 
the large surplus, which we see to be an object of desire to the 
workers in a combination or trust, represents to the consumer an 
excess of prices. So it comes to pass that the consumer, unable 
to combine in his economic capacity, as the workers do in their 
trade unions, combines as citizen and calls upon the Govern- 
ment to safeguard him against monopoHes. His first instinctive 
demand is, that such combinations shall be declared illegal 
bodies, acting in restraint of trade, and broken up. But nothing 
proves more plainly the inherent strength of the cohesive uni- 
fying tendencies than the completeness of the failure to achieve 
this object. When business men desire to combine, it is impossible 
to force them to compete. The alternatives are, either to leave 
the consuming public to the tender mercies of a monopoly, which, 
from mere considerations of profit, may not be able to raise its 
prices beyond a certain limit, or else to impose legal regulations, 
or, finally, to buy out the business, transferring it from a private 
into a public monopoly. 

Wherever the modern State is driven to confront this problem, 
it is compelled, in proportion as pubHc opinion is articulate and 
poHtically organised, to fasten an increasing measure of public 
control upon such powerful combinations, and to take over into 
the sphere of State enterprises those which cannot effectively be 
controlled. In such ways does modern society seek to heal the 
new discords generated by the very processes employed by the 
several businesses and trades in their search after an internal 
harmony. 

But the largest forms of capitalistic enterprise will tend more 
and more to transcend the limits of any single state, not only in 
their composition but in the powers they exercise upon subsidiary 
industries, and upon the general body of consumers throughout 
the industrial world. ^ The privately organised apparatus of 

^ The foremost example of such organisation in a great staple industry is the In- 



28o WORK AND WEALTH 

economic machinery, which constitutes the fabric of this eco- 
nomic world-state, has been described as a striking example of 
the expansion of industrial solidarity and harmony. But here 
again the possibiHties, nay, certainties, of new discord between 
capital and labour, producer and consumer, cannot be ignored. 
Hence the great social problems of the future will to a less and 
less extent He within the pohtical competence of single states or 
be soluble by the separate action of the Governments of those 
states. The vast currents of international capital and labour 
cannot flow without great disturbances of order and of economic 
interests often affecting several nations. The safe, successful, 
profitable, pursuit of large foreign enterprises by the capital and 
labour of persons belonging to many nationalities, will more and 
more involve common political action. 

§ 4. We are already beginning to recognise that our State is 
disabled for the fully satisfactory solution of some of the most 
pressing of our social problems. The immigration of foreign 
labour complicates our treatment of sweated industries. The 
improvement of conditions of labour in our trades may be ren- 
dered more difficult by the admission of sweated imports, or our 
feelings may be shocked by the influx of the products of slave 
labour. The policy of taxing interests and profits may be 
thwarted by our inability to trace the incomes derived from 
foreign investment and trade. A financial crisis in America or 
Germany may deplete our gold reserve and work havoc on our 
credit. As these movements gather force and frequency, the 
impotence of any single State to exercise an effective control 
over the primary economic interests of its people will grow more 
apparent. The gravest social-economic problems will be found 
insoluble except by international arrangement. An era of free 
conferences and of more or less loose agreements between States 
will lay the foundation for what in time must amount to inter- 
national regulation of industry. In other words, the economic 
internationalism, which I have traced, will weave for itself the 

ternational Iron & Steel Association, formed in July 191 1 by representatives of 
Austria, Belgium, Canada, France, Germany, Great Britain, Hungary, Russia, 
Spain, United States. The objects of this organisation were to regulate production, 
so as to control profitable prices and to prevent undercutting in times of depression. 
(Cf. Chiozza-Money, Things that Matter, Ch. XI). 



SOCIAL HARMONY IN ECONOMIC LIFE 281 

necessary apparel of political institutions. The true germ of 
world-federation is perhaps to be traced to-day less clearly at the 
Hague than at Bern, where the representatives of the leading 
industrial nations have already met to set the seal of their re- 
spective governments upon undertakings to promote common 
policies of legislation in such matters as the regulation of night 
labour for women, and the disuse of poisonous ingredients in the 
match trade. In such agreements, as in the better-known Postal 
Union (which also has its offices at Bern), one finds the earliest 
contributions made by modern industrialism to the federal gov- 
ernment of the world. 

These facts I cite, partly to enforce the thesis that the ten- 
dencies of modern industry which make for harmony and coopera- 
tion are gaining, both in the smaller and the larger areas, over 
those which make for discord and for competition. This grow- 
ing harmony of fact must tend to evoke a corresponding harmony 
of thought and feeling. But here we are retarded by a set of 
psychological obstacles which pervert or disguise the truth. I 
have alluded to the damage due to the false representation of na- 
tions as rival traders, contending for a limited market upon terms 
which signify that the gain of one is the loss of another. But the 
whole intellectual and moral atmosphere is thick with similar mis- 
takes of fact and fallacies of reasoning, chiefly sustained by false 
phrases which evoke false images and arouse injurious desires 
and passions. Ordinary business language is filled with selfish, 
separatist and combative phrases, representing trade as a warfare, 
in which every man must fight for his own hand, must force his 
wares upon the public, outwit or bludgeon his competitors, con- 
quer new markets, beat down the prices of the goods he buys, 
or in finance become a 'bull' or a 'bear.' In certain large de- 
partments of the business world there still remains so much dis- 
order, insecurity and competition as to afford support to these 
combative views and feelings. But they are no longer repre- 
sentative of the main normal activities of industry, and they 
ought and must by degrees be displaced by views and feeHngs 
accommodated to the more organic conception. It is an im- 
portant task of economic science to enforce conceptions of 
the operation of economic laws which will support these newer 



282 WORK AND WEALTH 

and sounder views and feelings. For only with this growing 
recognition of the social harmony represented by industry can 
the social will be nourished that is necessary to support and 
further it. So long as the ordinary business man or worker has 
his eyes, his mind, his heart and will, glued to the tiny patch of 
industry to which his own directly personal effort is applied, the 
pulse of humanity beats feebly through the system of industry. 
But let the ordinary education of every man and woman impose 
clear images of this economic order as a great human coopera- 
tion in which each bears an essential part, as producer, consumer 
and citizen, the quickened intelligence and sympathy will 
respond, so that the blind processes of cooperation will become 
infused and strengthened by the current of a conscious will. 



CHAPTER XIX 

INDIVIDUAL MOTIVES TO SOCIAL SERVICE 

§ I . Our examination of the existing industrial system discloses 
certain discords of interest and desire between the owners of the 
several factors of production, on the one hand, between pro- 
ducers and consumers on the other. Among the owners of factors 
of production the sharpest antagonisms are those between the 
capitalist employer and the wage-earner, and between the land- 
owner and the owners of all other factors. Except as regards the 
ownership of land, these antagonisms are not absolute but 
qualified. The interests of capital and labour, of producer and 
consumer, march together up to a certain point. There they 
diverge. These discords of interest materialise in what we term 
'the surplus,' that portion of the product which, though not 
essential to the performance of the economic process, passes 
to capital, labour or the consumer, according to the economic 
strength which natural or artificial conditions assign to each. 
The humanisation and rationalisation of industry depend, as we 
recognise, upon reforming the structure of businesses and in- 
dustries, so as to resolve these discords, to evoke the most 
effective cooperation, in fact and will, between the several parties, 
and to distribute the whole product, costs and surplus, among 
them upon terms which secure for it the largest aggregate utility 
in consumption. The operation of industry upon this truly and 
consciously cooperative basis, would, it is contended, evoke in- 
creased productive powers, by bringing into play those instincts 
of mutual aid that are largely inhibited by present methods, 
and by distributing the increased product so as to evoke the 
highest personal efl&ciency of life and character. 

But it would be foolish to ignore the doubts and objections 
which are raised against the spiritual assumption upon which 
this ideal of human industry is based. It is often urged that 
man is by nature so strongly endowed with selfish and com- 

283 



284 WORK AND WEALTH 

bative feelings, so feebly with social and cooperative, that he 
will not work efficiently under the reformed economic structures 
that are proposed. He must be allowed free scope to play for 
his own hand, to exercise his fighting instincts, to triumph over 
his competitors, and to appropriate the prizes of hazard and 
adventure, the spoils attesting personal force and prowess, or 
else he will withhold the finest and most useful modes of his 
economic energy. 

The distinctively spiritual issue thus raised is exceedingly 
momentous. Suppose that the business life can be set upon 
what appears to be a sound and equitable basis, is human nature 
capable of responding satisfactorily to such an environment? 
Putting it more concretely, are the actual powers of human 
sympathy and cooperation capable of being organised into an 
effective social will? This issue is seen to underlie all the doubts 
and difficulties that beset the proposals to apply our organic 
Law of Distribution for purposes of practical reform. All pro- 
posals by organised pubhc effort to abolish destitution give rise 
to fears lest by so doing we should sap the incentives to personal 
effort, and so impair the character of the poor. Among such 
critics there is entertained no corresponding hope or conviction 
that such a policy may, by the better and securer conditions of 
life and employment it affords, sow the seeds of civic feeling and 
of social solidarity among large sections of our population whose 
life hitherto had been little else than a sordid and unmeaning 
struggle. Proposals to secure for public use by process of taxa- 
tion larger shares of surplus wealth are met by similar apprehen- 
sions lest such encroachments upon private property should 
impair the application of high qualities of business and profes- 
sional ability. The growing tendency of States and Municipa- 
lities to engage in various business operations is strongly and 
persistently attacked upon the ground that sufficient public 
spirit cannot be evoked to secure the able, honest management 
and efficient working of such public concerns. 

Finally, the whole basic policy of the Minimum Wage and the 
Maximum Working-day is assailed on the same ground as a 
levelling down process which will reduce the net productivity 
of industry and stop all economic progress. 



INDIVIDU.\L MOTIVES TO SOCIAL SERVICE 285 

§ 2. To such criticism two replies are possible, each valid 
within its limits. The first consists in showing that the existing 
business arrangements are extremely ill-adapted for offering the 
best and most economically effective stimuli to individual pro- 
ductivity. They are not well-directed to discover, apply, and 
improve the best and most profitable sorts of human ability 
and labour. In other words, the actual system for utilising 
selfishness for industrial purposes is wofully defective: nine- 
tenths of the power remains unextracted or runs to waste. 

Those who rely upon this criticism base their reform pohcy 
upon the provision of better economic opportunities and better 
personal stimuli to individuals. But such reforms will not suffice. , 
What is needed above all is a social soul to inhabit the social 
body in our industrial system. A conscious coordinating prin- 
ciple — an industrial government, in which the consent of the 
governed shall be represented in their several wills and con- 
sciousness as well as in some central organic control — is to be 
desiderated. Now is this condition of thought and of desire 
really attainable? Can we really suppose that any sort of educa- 
tion is likely to arouse and maintain in the rank-and-file of em- 
ployees either in the public services or in the great private 
industries a sense of public duty and a realisation of the larger 
industrial harmony, which will compensate in any appreciable 
measure for the dulness and drudgery of their particular job, 
and furnish an effective check upon shirking or slacking? Sup- 
pose that a salary basis of payment, a shortened work-day and 
security of tenure, with adequate insurance against economic 
mishaps, had been obtained in all regular occupations, would the 
quickened sense of cooperation yield a productive energy ade- 
quate to the requirements? 

To this question it must, I think, be frankly answered, that 
we cannot tell. We have no sufficient data for a confident reply. 
The general reply of business men and of economists would, I 
think, be in the negative. It would be urged that the greater 
part of the routine work of industry will always remain so dull 
and tiresome, the sense of pubHc duty so weak and intermittent, 
that the fixed salary basis of remuneration will not prove an 
adequate incentive for the required amount of human effort. 



286 WORK AND WEALTH 

The experience of existing social services would be adduced 
in support of this judgment. Public employees, it is complained, 
woric with less energy than private employees; there is more 
slacking and scamping and more malingering; the 'government 
stroke' has become a by- word. The dignity of social service 
does not evoke any clear response in the breast of the employee. 
Such is the complaint. It is probably not ill-founded. The 
great mass of pubhc employees are certainly not animated by 
much conscious pride and satisfaction in rendering social service. 
But, before registering a final judgment upon such evidence, 
certain qualifying considerations must be taken into account. 

The attitude of a worker towards his work will be strongly 
affected by the prevaihng attitude of those around him. So 
long as the general economic environment is one in which the in- 
terests of employer and employed are represented as antagonistic, 
similar ideas and sentiments will continue to affect the feelings 
of public servants. They will not realise that they are working 
for themselves in working for society of which they are members: 
they will treat the department for which they work rather as 
an ahen or a hostile body, bent upon getting as much out of 
them and giving as little as possible. It is just here that we 
touch the most sensitive spot in the psychology of government, 
the best recognised defect of bureaucracy. The higher officials, 
who control and manage public businesses, evoke in the rank- 
and-file of the public employees very much the same sentiments 
of estrangement or opposition that prevail in most private 
businesses between employer and employee. For in point of 
fact, the temper and mental attitude of higher officials are those 
of a master in his own business, not those of a public servant. 
That affects their dealings not only with the rank-and-file in 
their department, but with the outside public. In a so-called 
democracy, where the highest as well as the lowest officers of 
state are paid by the people to do work for the people, no method 
of effective popular control over the official services has yet been 
devised. The absence of any such control is clearly recognised 
by all high officials, and it powerfully influences their mind and 
their behaviour. Uncontrolled, or insufficiently controlled power, 
of course, affects differently different types of men. It induces 



INDIVIDUAL MOTIVES TO SOCIAL SERVICE 287 

slackness and the adoption of a slow conservative routine in 
those of torpid disposition. Men of arbitrary temper will be 
led to despotic treatment of their staff. Men of brains and en- 
terprise will be free to embark upon expensive enterprises, to 
the gain or loss of their paymasters. But in no case does the 
actual situation favour the permeation of the public service by 
a full sense of social cooperation and joint responsibility. High 
officials may and often do exhibit great energy and disinterested 
zeal in the public service. But the sense of mastery, both in 
relation to the lower grades of employee and to the pubHc, is 
always discernible. They have this power and they know it. 
Until, therefore, the sense of public service can be made a reality 
among the higher public officers, no true test of the efiicacy of 
the general will is to be obtained. This reformation of Bureau- 
cracy is the chief crux of modern democracy. For unless some 
mode is found of expelling from the higher public servants the 
pride of caste, and of keeping them in S3nnpathetic contact with 
the general current of popular feehng, the mass of the subordinate 
employees will not respond to the social claim upon their eco- 
nomic energies. 

Finally, the familiar criticism of the inefficiency of public em- 
ployees in this country does not take proper account of conditions 
of employment. For while the top grade of officials is paid more 
handsomely and enjoys more dignity and security than in other 
countries, the lower grades are often subject to conditions of pay, 
hours and tenure, not appreciably better than those prevailing 
in the ordinary labour-market. Until these conditions are im- 
proved, it may reasonably be contended that the dignity of 
pubhc service cannot be expected to furnish an effective economic 
motive. 

If, however, increased security of life and liveHhood could be 
obtained for the people, with such improvement of our educa- 
tional system as provided adequate opportunities for enabling the 
children of the poorer classes to enter all grades of the public 
services, the beginnings of a great change in the spirit of those 
services might be attained. For, if the wide gaps of dignity and 
of emoluments, which divide at present the higher from the 
lower grades, could be reduced, while at the same time effective 



288 WORK AND WEALTH 

publicity and criticism could be brought to bear upon all de- 
partments of public work, the 'bureaucratic state' might be 
transformed into something more nearly approaching a self- 
governing society. 

§ 3. The cool practical business men will, however, probably 
insist that none of these devices for improving education and 
for stimulating public spirit will enable a public department to 
get out of its employees so large an output of productive energy 
as can be secured by the stimuh of private profit-seeking enter- 
prise. And this may possibly be true. But those who have 
accepted the general lines of our analysis will recognise that such 
an admission is not fatal to the case for salaried employment and 
public service. For the private business is primarily concerned 
with one side of the human equation, the product, and is able 
in large measure to ignore the human costs involved in getting 
it. But the State, as representing the human welfare of its 
members, must take the costs into account as well. An intelH- 
gent Society would regard it as a foolish policy to attempt to get 
out of its employees the amount of daily toil imposed under the 
conditions of most profit-making businesses. While, therefore, 
it is true that a public service, run upon an adequate basis of 
fixed salary and short work-day, would stand condemned, if the 
output of effective energy per man fell greatly below that furnished 
under the drive of ordinary capitalism, a shght reduction of that 
output might be welcomed as involving an actual gain in human 
welfare. The diminished utility of the product might be more 
than compensated in terms of human welfare by the diminished 
human cost of the productive process. 

It is not, therefore, incumbent upon the advocates of a new 
industrial order, based upon a closer application of the organic 
law, to show that such an order will yield at least as large an 
output of economic energy and economic product as can be got 
out of the mixed competition and combination which prevail 
at present. Applying this standard of human valuation, they are 
entitled to set off against any reduction of purely economic 
stimuli that may ensue from their reforms, not only the relief 
in human costs which accompanies such reduction but the en- 
largement of other human gains. 



INDIVIDUAL MOTIVES TO SOCIAL SERVICE 289 

For, though in this endeavour to value industrial activities 
and products in terms of human welfare, we have for the most 
part confined ourselves to the human costs and utilities directly 
connected with the processes of economic production and con- 
sumption, we cannot ignore the wider meaning of these pro- 
cesses. Man lives not by bread, or economic goods, alone, but 
by 'admiration, hope and love.' Though the various non- 
economic goods and activities do not directly enter into our 
human valuation of industry, we cannot neglect the interac- 
tions between the economic and the other human interests in- 
volved in the organic nature of man and of society. 

§ 4. The wider problem of human economy, the employment 
of all human powers for human welfare, must in fact involve a 
continual readjustment between the respective claims of the 
economic and the non-economic activities upon our lives. Most 
thoughtful critics of our age complain that this adjustment is 
defective in that business bulks too largely in our lives. They 
consider that our modern command over the resources of nature 
for the satisfaction of our wants ought to issue not so much in 
the larger supply of old, and the constant addition of new eco- 
nomic wants, as in the increased liberation of human powers for 
other modes of energy and satisfaction. There exist whole coun- 
tries even in our time, such as China, where population lies so thick 
upon the earth, and where the arts of industry remain so primi- 
tive, that virtually the whole vital energy of the people must be 
absorbed in the economic processes. This is not our case. With 
our improving arts of industry and our dwindling growth of 
population, we can afford to give an increasing share of our in- 
terests and energies to the cultivation and enjo3anent of intel- 
lectual and moral goods. The gradual realisation of this human 
economy is the best measure of our civilisation. Our greatest 
impediment in this progress is the superstitious and excessive 
value put by all classes of our people upon industry and property. 
This is almost identical with a charge of materialism, for economic 
values centre round material forms of property. 'Getting and 
spending we lay waste our powers. ' This is a literal statement 
of our bad economy. Until we can, as a nation, throw off the 
dominion of the economic spirit, we cannot win the spiritual 



290 WORK AND WEALTH 

liberty needed for the ascent of man. So long as we stand, for 
full six-sevenths of our time and more, with hands and eyes, in- 
telligence and will, dedicated to the service of industrialism, we 
cannot see, much less realise, better ideals of humanity. Ab- 
sorbed in earning a livehhood, we have no time or energy to live. 

Such sentences as these, I am well aware, have become com- 
monplaces, and such wisdom as they contain has so become 
almost impotent. This drawing of the fangs of truth by reducing 
it to truisms is one of the most serious obstacles to intellectual 
and moral progress. From the time of Wordsworth to the 
present day our wisest teachers have demanded that industry 
and property shall be put in their right places as servants, not 
masters, of men, and that our conquest over nature shall be 
attended by a liberation of all sorts and conditions of men from 
the tyranny of matter. In no adequate degree has this liberation 
been achieved. The iron of industrialism has entered so deeply 
into our souls that we are loth to use our liberty. Why is 
this so? 

Man is a spiritual as well as a material being. His ascent in 
civilisation implies an increasing satisfaction of his spiritual 
needs. In this higher life economic processes and market values 
play a diminishing part. How comes it, then, that the vast 
economies of modern industry have done so little to release us 
from the bondage of the economic system? Why have industry 
and property retained so dominant a grasp upon our thoughts and 
feelings, continually checking our aspirations to the higher hfe, 
continually encroaching on the time and energy which by rights 
would seem to belong to that life? 

§ 5. The true answer to these questions is not difficult to 
find. We have sketched a growing order, harmony and unity, 
of industrial Hfe, concerned with the regular supply of economic 
needs for mankind. Were such an order effectively achieved, 
in accordance with the rational and equitable application of our 
human law of distribution, the economy of industrial processes 
would be accompanied by a corresponding economy of thought 
and emotion among the human beings engaged in this common 
cooperation. This social economy demands, as we have seen, the 
substitution of social welfare for private profit as the directing 



INDIVIDUAL MOTIVES TO SOCIAL SERVICE 291 

motive throughout industry. But it does not imply a com- 
pletely socialistic system in which each productive process is 
under the direct and exclusive control of Society. For that 
assertion of absolute unity would contain a denial of the mani- 
foldness of desire and purpose involved in the very concept 
cooperation. Scope must remain, in the interests of society it- 
self, for the legitimate play of individuaHty. The well-ordered 
society will utiHse the energies of egoism in fruitful fields of in- 
dividual activity. The human ego will always seek a directly 
personal self-expression in the free exercise of artistic instincts 
and other creative or adventurous activities that yield the glory 
of achievement. 

These primarily self-regarding impulses are made socially pro- 
fitable by allowing them free expression in these fields. The 
attempt to regulate and direct these impulses and their pro- 
ductive activities would be disastrous. This play of unfettered 
personality in the fine arts, in literature, in the unsettled and 
experimental section of each profession and each trade, must be 
conserved, not as an inherent right of individuals but as a sound 
social economy. For the distinction between these free creative 
activities and the ordinary run of routine work in the trade and 
professions is fundamental. It is not that the former, the free 
unorganised activities, are not as truly social as the latter in their 
ultimate significance and worth. But their social value is best 
secured by leaving them to the stimuli of personal interests. The 
creative activities, including all work which pleasure, interest, 
surprise or personal pride, cause to be desired upon its own 
account, need no social compulsion to evoke them. Their product 
is the free gift which the individual makes to the commonwealth 
out of the riches of his active personality. As their cost to him 
is more than compensated by the pleasures of creation, he will 
contribute them freely to the service of mankind. But even if 
a coarser streak of selfishness causes the creative artist, poet, 
inventor, discoverer, to claim some large share of the marketable 
value of his product for himself, it will better serve society to 
pay him his price, than to attempt to 'organise' creation on a 
public basis. Such sufficient material rewards of genius or high 
talent, if they are really necessary to evoke the creative activity, 



292 WORK AND WEALTH 

must rightly be considered 'costs' rather than * surplus.' There 
will remain a margin of such unfettered private enterprise, not 
only in the fine arts and the learned professions, where the crea- 
tive mind seems most in evidence, but at the growing point of 
every living industry. For the distinction between creation and 
imitation or routine, as we have seen, cannot be applied in a 
wholesale way to entire trades and occupations. Budding and 
experimental industries, involving large application of inventive 
and constructive energy, appealing to new and uncertain tastes, 
carrying heavy risks of capital and reputation, are better left to 
individual enterprise. The same industries, settled on estab- 
lished lines, with smaller risks and smaller opportunities of useful 
change, will properly pass under direct social control. It is hardly 
conceivable that the development of the motor-car and the aero- 
plane could have been so rapid, if these industries had been at the 
outset claimed as State monopolies and official experts had alone 
been set to operate them. The injurious retardation of electric 
lighting and transport in this country by the legal shackles im- 
posed upon them has been a striking testimony to the social harm 
done by premature application of social control to an industry in 
its early experimental stage. 

On the other hand, it is equally foolish to exclude from effect- 
ive social regulation or state organisation entire professions, 
such as teaching, law, or medicine, on the ground that they are 
essentially 'creative.' For they are not. The very name pro- 
fession implies the adoption of prescribed and accepted methods 
for dealing with large ordinary classes of cases, that is to say 
routine procedure. Though, as we recognise, such procedure 
may never reach the same degree of mechanical routine as pre- 
vails in ordinary processes of manufacture, the common factors 
may be so predominant as to bring them properly under the same 
public regimen. Though, for example, class-teaching will always 
carry some element of originality and personal skill, a true regard 
for public interests establishes close public control of curriculum 
and method in those branches of instruction in which it is con- 
venient to give the same teaching to large numbers of children 
at the same time. In education, as in medicine and in every 
other skilled calHng, there are grades of practice rightly classed 



INDIVIDUAL MOTIVES TO SOCIAL SERVICE 293 

as regular or routine. Where it is important for members of the 
pubhc to be able to obtain such services, in reliable qualities 
upon known and reasonable terms, effective social control of them 
must be secured. For, otherwise, a power of private tyranny or 
of extortion or neglect is vested in the producers of such services. 
The inadequate public control over the medical and legal services 
in this country is raising a crop of grave practical problems for 
early solution. 

So in every industry or occupation the relatively routine work 
requires direct social organisation while the preponderantly 
creative work should be left to 'private' enterprise. The former 
class contains the great bulk of those industries which, concen- 
trated in large businesses for the profitable supply of the prime 
needs and conveniences of ordinary men and women, breed com- 
binations and monopolies. Whereas in the creative industries 
there exists a natural harmony of interests between producer 
and. consumer that will secure to society the best fruits of in- 
dividual effort, this is not the case in the routine industries. 
There the operation of the human law of distribution can only 
be secured by direct social organisation. Only thus can excessive 
private surplus, involving a tyranny over labour on the one hand, 
the consumer on the other, be prevented. In no other way can 
the main organs of industry be infused with the human feelings 
of soHdarity and cooperation essential to the stabiHty and pro- 
gress of social industries. 

§ 6. For to this vital point we must return. The substitution 
of direct social control for the private profit-seeking motive in the 
normal processes of our industries is essential to any sound scheme 
of social reconstruction. For not otherwise can we get the social 
meaning of industry represented consciously in the cooperative 
will of the human factors of production. It is not too much to 
say that the pace of civilisation for nations, of moral progress 
for individuals, depends upon this radical reconstruction of 
common industry. For the existing structure of ordinary busi- 
ness life inhibits the realisation of its social meaning by the stress 
it lays upon the discordant and the separatist interests. The 
struggle to keep or to improve one's hold upon some place in the 
industrial system, to win a livelihood, to make some gain that in- 



294 WORK AND WEALTH 

volves a loss to someone else, derationalises the intelligence and 
demoralises the character of all of us. 

This derationahsation and demoralisation are seen to be 
rooted in the defective structure and working of industrialism 
itself. 

If Industry were fairly apportioned among all, according to the 
capabihty of each, if Property were allotted to each according to 
his needs, by some natural process of distribution as regular and 
certain as the process of the planets, persons would not need to 
think or feel very keenly about such things as Industry and 
Property: their intellects and hearts would be free for other in- 
terests and activities. 

But the insecurity, irregularity and injustice of economic 
distribution keep Industry and Property continually in the fore- 
ground of the personal consciousness. 

Here comes into terrible relief the moral significance of the 
unearned Surplus — the term which gathers all the bad origins 
of Property into the focus of a single concept. 

At present much Industry is conducted, much Property is ac- 
quired, by modes which are unjust, irrational and socially in- 
jurious. Legal privilege, economic force, natural or contrived 
scarcity, luck, personal favour, inheritance — such are the means 
by which large quantities of property come to be possessed by 
persons who have not contributed any considerable productive 
effort to their making. 

Such property stands in the eye of the law, and in the popular 
regard, upon precisely the same footing as that owned by those 
who have earned it by the sweat of their brow, or the effort of 
their brain. The failure of so many thoughtful men and women 
to appreciate the vital bearing of the issue of origins upon the 
validity of property is the supreme evidence of the injurious re- 
actions of the present property system upon the human mind. 
The crucial moral fallacy which it evokes is the contention, 
seriously put forth by certain social philosophers, as well as by 
social reformers, that property acquired in the ways I have just 
indicated is vahdated in reason and morahty by the good uses to 
which it may be put by its owners. Mr. Carnegie and Mr. 
Rockefeller have seriously propounded the theory that certain 



INDIVIDUAL MOTIVES TO SOCIAL SERVICE 295 

individuals are endowed by nature or by circumstances with the 
opportunity and power of accumulating great wealth, but that 
their wealth, though legally their private property, is rightly to 
be regarded b}'' them as a 'social trust' to be administered by 
them for the benefit of their fellow-men. It seems to them a 
matter of indifference that this wealth is 'unearned,' provided 
that it is productively expended. So fragments of profits, earned 
by sweating labour or by rack renting tenants, are spent on pen- 
sions, public hospitals or housing reform. Fractions of the ex- 
cessive prices the consuming public pays to privileged transport 
companies or 'protected' manufacturers are given back in parks 
or universities. Great inheritances, passing on the death of rich 
bankers, contractors or company promoters, drop heavy tears 
of charity to soften the fate of those who have failed in the busi- 
ness struggle. Fortunes, gained by setting nation against nation, 
are applied to promote the cause of international peace. This 
humor is inevitable. Unearned property can find no social uses 
more exigent than the application of charitable remedies to the 
very diseases to which it owes its origin. So everywhere we find 
the beneficiaries of economic force, luck, favour and privilege, 
trying to pour balm and oil into the wounds which they have 
made. The effect of the process, and what may be called its 
unconscious intention, is to defend the irrationality and injustice 
of these unearned properties by buying off clear scrutiny into 
their origins. Sometimes, indeed, the intention attains a measure 
of clear consciousness, as in the cases where rich men or firms 
regard the subscriptions given to public purposes as sound busi- 
ness expenditure, applying one fraction of their gross profits to 
a propitiation fund as they apply another to an insurance fund. 
§ 7. The radical defect of this doctrine and practice of the 
' social trust ' is its false severance of origin from use. The organic 
law of industry has joined origin and use, work and wealth, pro- 
duction and consumption. It affirms a natural and necessary 
relation between getting and spending. A man who puts no 
effort into getting, a rent-receiver, cannot put well-directed 
effort into spending. He is by natural proclivity a wastrel. A 
man who is purely selfish in his getting, as the sweater, gambler, 
or monopolist, cannot be social in his spending. The recipient 



296 WORK AND WEALTH 

of unearned income is impelled by the conditions of his being to 
a Kfe of idleness and luxury: this is the Ufe he is fitted for. He is 
unfitted for the administration of a social trust. 

These obvious truths, so fatally neglected, are no vague 
maxims of revolutionary ethics, but are firmly rooted in physical 
and moral fact. We have seen that there is throughout organic 
fife a quantitative and a quaHtative relation between function 
and nutrition, each being the condition of the other. He who 
does not eat cannot work: he who does not work cannot eat. 
It is true that the latter law works less directly and less imme- 
diately than the former. Parasitism, individual or social, con- 
tinues to exist in many walks of life. But it never thrives, it 
always tends to degeneration, atrophy and decay. Normally, 
and in the long run, it remains true that 'Whosoever will not 
work, neither can he eat.' If then the recipiency of unearned 
wealth, parasitism, disables the recipient from putting his 'prop- 
erty' to sound personal uses, is it likely that he can put it to 
sound social uses? Though abnormal instances may seem, here 
as elsewhere, to contravene the natural law, it remains true that 
the power of individual earning, not merely involves no power 
of social spending, but negates that power. It might even be 
contended that there will be a natural disposition in the recipient 
of unearned wealth to spend that wealth in precisely those ways 
in which it injures most the society he seeks to serve. This is 
probably the case. It is more socially injurious for the mil- 
lionaire to spend his surplus wealth in charity than in luxury. 
For by spending it on luxury, he chiefly injures himself and his 
immediate circle, but by spending it in charity he inflicts a 
graver injury upon society. For every act of charity, applied to 
heal suffering arising from defective arrangements of society, 
serves to weaken the personal springs of social reform, alike by 
the 'miraculous' rehef it brings to the individual 'case' that is 
relieved, and by the softening influence it exercises on the hearts 
and heads of those who witness it. It substitutes the idea and 
the desire of individual reform for those of social reform, and so 
weakens the capacity for collective self-help in society. The 
most striking testimony to the justice of this analysis is furnished 
by the tendency of 'model milUonaires' to direct all their charity 



INDIVIDUAL MOTIVES TO SOCIAL SERVICE 297 

to wholesale and what they deem social purposes, rather than to 
individual cases. In order to avoid the errors of indiscriminate 
charity, they fasten their munificence upon society in the shape 
of universities, hospitals, parks, hbraries and other general 
benefits. Realising quite clearly, as they think, that the char- 
acter of an individual is weakened and demoralised by a charitable 
donation which enables him to get what otherwise he could only 
have got by his personal exertion, they proceed to weaken and 
demoraHse whole cities and entire nations, by doing for these 
social bodies what they are quite capable of doing for themselves 
by their own collective exertions. These public gifts of milHon- 
aires debauch the character of cities and states more effectively 
than the private gifts of unreflecting donors the character of 
individuals. For, whereas many, if not most, of the private re- 
cipients of charity are victims of misfortune or of lack of oppor- 
tunity, and are not fully responsible for the evil plight in which 
they stand, this is not the case with an organised self-governing 
community, a City or a State. Such a society is able, out of its 
own resources, if it chooses to secure and use them, to supply 
for itself all its own legitimate needs. It has a far larger self- 
sufficiency for meeting all ordinary emergencies and for following 
an economy of self-development and progress, than has the indi- 
vidual citizen. For it can supply its needs out of the social in- 
come which its collective life is constantly assisting to produce, 
out of that very surplus which, wrongly allowed to ffow, unearned, 
into the coffers of rich individuals, is the very fund used for this 
debasing public charity. 

§ 8. The clear recognition of these truths is closely germane to 
our central consideration in this chapter, viz., the question whether 
there can be evoked in the common consciousness a flow of true 
social or cooperative feeling strong and steady enough to evoke 
from individual citizens a sufl&cient voluntary efficiency in pro- 
duction. No absolutely convincing answer to the question is 
at present possible. But, if any such experiment is to be tried 
hopefully, it can only be done by setting Property upon an in- 
telligible moral and social basis, so that it passes into the pos- 
session of him to whom it is really 'proper,' in the sense that he 
has put something of himself into its making. Only by resolving 



298 WORK AND WEALTH 

unearned into earned income, so that all Property is duly earned 
either by individuals or by societies, can an ethical basis be laid 
for social industry. So long as property appears to come mirac- 
ulously or capriciously, irrespective of efforts or requirements, 
and so long as it is withheld as irrationally, it is idle to preach 
'the dignity of labour' or to inculcate sentiments of individual 
self-help. 

When all Property is visibly justified, alike in origin and use, 
the rights of property will for the first time be respected, for they 
will be for the first time respectable. To steal, to cheat, to 
sweat, to cadge or beg, will be considered shameful, not because 
the law forbids, but because such acts will be felt by all to be 
assaults upon the personality of another. For the first time in 
history, also, the tax-dodger, the contractor who puts up his 
price for pubhc works, the sinecurist, the jobber, the protec- 
tionist and other parasites upon the public purse, will receive 
the general reprobation due to robbery. For when the State is 
recognised as having rights of property identical in origin and 
use with those of individual citizens, that property will claim 
and may receive a similar respect. Property, in a word, becomes 
a really sacred institution when the human law of distribution is 
appHed to the whole income, surplus as well as costs. Such 
inequalities in income as survive will be plainly justified as the 
counterpart of inequality of efforts and of needs. The wide 
contrasts of rich and poor, of luxury and penury, of idleness 
and toil, will no longer stagger tlje reason and offend the 
heart. 

So the standard of sentimental values which affects the con- 
ventional modes of living of all classes — largely by snobbish 
imitation and rivalry — will be transformed. 

Ostentatious waste and conspicuous leisure, with all their 
injurious reactions upon our Education, Recreation, Morals, 
and Esthetics, will tend to disappear. The illusory factor of 
Prestige will be undermined, so that the valuations, both of 
productive activities and of consumption, will shift towards a 
natural, or rational, standard. 

§ 9. Not merely will the wide gulf which severs mental from 
manual workers disappear, but all the elaborate scale of values 



INDIVIDUAL MOTIVES TO SOCIAL SERVICE 299 

for different sorts of intellectual and manual work would undergo 
a radical revision. 

The effect of setting on a human basis the industry of the 
country would, of course, react upon all other departments of life, 
Religion, Family and Civic MoraHty, Politics, Literature, Art and 
Science. For though economics alone cannot mould or inter- 
pret history, the distinctively economic institutions of Industry 
and Property have always exercised a powerful, sometimes 
a dominant influence, upon other institutions. The reforma- 
tion of economic life must, therefore, produce equally bene- 
ficent effects upon all other departments — transforming their 
standards and feeding the streams of their activities with new 
thoughts and feelings, drawn no longer from the minds of a 
Httle class or a few original natures, but from the whole tide of 
human life flowing freely along every channel of individual and 
social endeavour. 

The security and rationality of the economic order will give 
to all that confidence in man, and that faith in his future, which 
are the prime conditions of safe and rapid progress. For the 
brutal and crushing pressure of the economic problem in its 
coarsest shape — how to secure a material basis of livelihood — 
has of necessity hitherto absorbed nearly all the energy of man, 
so that his powers of body, soul and spirit have been mainly 
spent on an unsatisfactory and precarious solution of this per- 
sonal economic problem. Religion, politics, the disinterested 
pursuits of truth or beauty, have had to live upon the leavings of 
the economic life. 

An economic reformation which, by applying the human law 
of distribution, absorbs the unproductive surplus, would thus 
furnish a social environment which was stronger and better in 
the nourishment and education it afforded to man. Every or- 
gan of society would function more effectively, supplying richer 
opportunities for healthy all-round self-development to all. 
So far as the economic activities can be taken into separate 
consideration, it is evident that this justly-ordered environment 
would do much to raise the physical, and more to raise the moral 
efficiency of the individual as a wealth-producer and consumer. 
But its most important contribution to the value and the growth 



300 WORK AND WEALTH 

of human welfare would lie in other fields of personality than the 
distinctively economic, in the liberation, realisation and im- 
proved condition of other intellectual and spiritual energies at 
present thwarted by or subordinated to industrialism. 



CHAPTER XX 

THE SOCIAL WILL AS AN ECONOMIC FORCE 

§ I . To secure by education and reflection such a revaluation 
of human activities, aims and achievements, as will set economic 
processes and products in a definitely lower place than that 
which they occupy at present, is, I think, essential to safe and 
rapid progress. For the early steps towards a better industrial 
order will very likely involve some economic sacrifice, in the sense 
of a reduced output of personal energy and of wealth-production 
on the part of the average member of society. Although this 
loss may be more than compensated by the elimination of 
large wastes of competition and by improved organisation, 
we are not warranted in assuming that this will at once take 
place. 

We need not assume it. For even if we do not, our analysis has 
shown that an economic system, thus working at a lower rate 
of human costs, and turning out a smaller quantity of goods, may 
nevertheless yield a larger quantity of human welfare, by a better 
distribution of work and product. But the great gain, of course, 
will consist in the increased amount of time, interest and energy, 
available for the cultivation of other human arts outside the 
economic field. Upon the capacity to utilise these enlarged 
opportunities the actual pace of human progress in the art of 
Hving will depend. At present this capacity may seem small. 
The increased opportunities of leisure, travel, recreation, culture, 
and comradeship, which have come in widely different degrees to 
all classes, have often been put to disappointing uses. But a 
great deal of such waste is evidently attributable to that prevail- 
ing vice of thought and feeling which the domination of industrial- 
ism has stamped upon our minds, the crude desires for physical 
sensations and external display. Not until a far larger measure 
of release from our economic bonds has been acquired, shall we 

301 



302 WORK AND WEALTH 

enjoy the detachment of mind requisite for the larger processes 
of revaluation and realisation. 

§ 2. One word remains, however, to be said upon the all- 
important subject of motives and incentives. We have seen 
that, in so far as it is possible to displace the competitive system 
of industry, with its stimulation of individual greed and com- 
bativeness, by a more consciously cooperative system, the will 
of the individual engaged upon industrial processes will be af- 
fected in some measure by the social meaning of the work he 
is doing, and will desire to forward it. The efhcacy of this social 
will is not, however, adequately realised so long as it is regarded 
merely as a feeling for the public good originating from a number 
of separate centres of enhghtened personality. The growing 
recognition on the part of individual workers, that the structure 
of society establishes a strong community of interests, will no 
doubt supply some incentive to each to do his fair share to the 
necessary work. But this personal incentive may not go very 
far towards overcoming the selfishness or sluggishness of feebler 
personalities. If, then, the social will be taken merely to mean 
the aggregate of feeling for the public good thus generated in the 
separate wills, it may not suffice to support the commonweal. 
But if our organic conception of society has any validity, the 
social will means more than this addition of separately stimulated 
individual wills. The individual soldier may have a patriotic 
feeling expressing his individual love of his country, which has a 
certain fighting value. But, as his attachment to his profession 
grows, another feeling of wider origin and more enduring force 
fuses with the narrower feeling, enhancing greatly its effective- 
ness. That feehng is esprit de corps, a corporate spirit of the 
service, capable of overcoming personal defects, the cowardice, 
apathy or greed of the individual, and of evoking an enormous 
volume of united effort. I have no intention of siiggesting that 
the routine of ordinary industry can yield scope for displays of 
this esprii de corps comparable in intensity with the dramatic 
examples of great military achievements. But I do affirm that 
every conscious corporate life is accompanied and nourished by 
some common consciousness of will and purpose which feeds and 
fortifies the personal centres, stimulating those that are weaker 



THE SOCIAL WILL AS AN ECONOMIC FORCE 303 

and raising them to a decent level of effort, reducing dissension, 
and imparting conscious unity of action into complex processes of 
cooperation. 

The power of this social will as an economic motive-force ought 
not to be ignored. As the processes of industrial cooperation 
grow closer, more numerous, more regular in their operation, 
this cooperation and coordination, representing a unity of will 
and purpose far transcending the vision and the purpose even 
of the most enlightened and altruistic member, will form a 
powerful current of industrial consciousness, influencing and 
moulding the will and purposes of individuals. 

Such a force, emanating from the social whole, will of necessity 
not be clearly comprehensible to the individuals who feel its 
influence and respond to it. They are the many, while it flows 
from their union, which must always be imperfectly mirrored 
in the mind of each. Yet this direct social will only works through 
its power to stimulate and direct the wiU of each, so as to produce 
a more effective harmony. Vague theory this will seem to some, 
utterly remote from the hard facts of life! The problem is how 
to induce pubhc or other salaried employees to do a fair day's 
work, when they might shirk it without loss of pay. Well, we 
suggest that when that fair day's work is not unduly long or 
onerous, when it is fairly paid, and when each sees that all the 
others are called upon to do their proper share, the general sense 
of fairness in the arrangement will come to exercise a compelling 
influence on each man to keep his output up to a decent level. 
This power of the social will has never yet been tested. For a 
society with arrangements based on manifest principles of 
justice and reason has never yet been set in operation. But 
though our organic law of distribution may never attain a perfect 
application, so far as it is applied it may surely be expected to 
act in the way here described, appealing to the springs of honour, 
equity, comradeship and respect for public opinion, with a 
force immeasurably greater than is possible in a system of in- 
dustry and property where reason and fair play in the apportion- 
ment of work and its rewards are so imperfectly apparent. 

§ 3. These conditions of organic welfare in the apportionment 
of work and wealth do not imply a conception of industrial soci- 



304 WORK AND WEALTH 

ety in which the individual and his personal desires and ends are 
impaired or sacrificed to the interests of the community. They 
do imply a growth of the social-economic structure in which the 
impulses of mutual aid, which from the earliest times have been 
civilising mankind, shall work with a clearer consciousness of 
their human value. As the individual perceives more clearly 
how intimately his personal efforts and effects are, in process and 
in product, linked with those of all the other members of society, 
that perception must powerfully influence his feelings. He will 
come consciously to reaHse his personal freedom in actions that 
are a willing contribution to the common good. This conscious- 
ness will make it more difi&cult for him to defend in himself or 
others economic conduct or institutions in which individual, 
class or national conflicts are involved. Thus a better social 
consciousness and a better economic environment will react on 
one another for further mutual betterment. The unity of this 
social-industrial life is not a unity of mere fusion in which the 
individual virtually disappears, but a federal unity in which the 
rights and interests of the individual shall be conserved for him 
by the federation. The federal government, however, conserves 
these individual rights, not, as the individualist maintains, be- 
cause it exists for no other purpose than to do so. It conserves 
them because it also recognises that an area of individual Kberty 
is conducive to the health of the collective life. Its federal 
nature rests on a recognition alike of individual and social ends, 
or, speaking more accurately, of social ends that are directly 
attained by social action and of those that are realised in in- 
dividuals. I regard such a federation as an organic union because 
none of the individual rights or interests is absolute in its sanction. 
Society in its economic as in its other relations is a federal state 
not a federation of states. The rights and interests of society 
are paramount : they override all claims of individuals to liberties 
that contravene them. 

§ 4. So far as industry is concerned, we perceive how this 
harmony between individual and social rights and interests is 
realised in the primary division of productive activities into Art 
and Routine. The impulses and desires which initiate, sustain 
and direct what we term art, including all the creative activities 



THE SOCIAL WILL AS AN ECONOMIC FORCE 305 

in industry, flow freely from the individual nature. We recog- 
nise that productive activities in which these elements are of 
paramount importance form an economic field which society, 
guided by its intelligent self-interest, will safely and profitably 
leave to individuals and private enterprise. Industries which 
are essentially of a routine character, affording Kttle scope for 
creative activities of individuals, must pass under direct social 
administration. For free individual initiative and desires will 
not support them. They can only be worked under private 
enterprise on condition that great gains are procurable for the 
entrepreneurs and an unfree body of proletarian labour is available 
for compulsory service. The routine services of society cannot 
properly be secured by appeals to the separate self-interests of 
individuals. So administered, they involve the waste of vast 
unearned gains accruing to a private caste of masters, the injury 
and degradation of economic gervitude in the workers, and a 
growing insecurity and irregularity of service to the consumers. 
The only volume of free-will and voluntary enterprise that can 
support those routine industries is the free-will and enterprise 
of Society. If we can bring ourselves to regard the great normal 
currents of routine industry, engaged in supplying the common 
daily needs, from the standpoint of a real live Society, we shall 
recognise that to that Society this industrial activity and its 
achievements are full of interest and variety. What to the in- 
dividual is dull routine is to Society creative art, the natural em- 
ployment of social productive energies for the progressive satis- 
faction of social needs. Though the individual will soon flags 
before demands for work so irksome and repellent to its nature, 
the social will gladly responds to work in which that will finds 
its free natural expression. 

This is the ultimate argument in favour of the socialisation 
of the routine industries, viz., the release of the individual will 
from work that is costly, repellent and ill-done, in order to enable 
the social will to find in that work its healthy, interesting, educa- 
tive self-reaHsation. For once conceive Society as a being capable 
of thought and feeling, these processes have an interest for it. 
They are social art, part of the collective life in which Society 
realises itself, just as the individual realises himself in individual 



3o6 WORK AND WEALTH 

art. Once accept the view of Society not as a mere set of social 
institutions, or a network of relations, but as a collective per- 
sonality, the great routine industrial processes become the vital 
functions of this collective being, interesting to that being alike 
in their performance and their product. That subdivision of 
labour and that apparent contradiction of interests between 
producer and consumer which seem designed to feed personal 
antagonisms and to thwart individuality, now acquire rational 
justification as the complex adaptive play of healthy vital func- 
tions in Society. 

§ 5. Labour, thus interpreted, becomes a truly social function, 
the orderly half -instinctive half -rational activity by which society 
helps itself and satisfies its wants, a common tide of productive 
energy which pulses through the veins of humanity, impelling 
the individual members of society to perform their part as con- 
tributors to the general life. Whether those individual actions 
are strictly voluntary, pleasurable and interesting in themselves 
to those who perform them, as in the finer arts, or are compulsory 
in their main incidence upon the individual, and accompanied 
by little interest or social feeling on his part, is a matter of quite 
secondary importance as viewed from the social standpoint. As 
labour is social, so is capital. The other apparent discrepancy, 
that between the interests of present and future, spending and 
saving, also disappears when we consider the social signific- 
ance of saving. For society secretes capital by the same half- 
instinctive half-rational process by which it generates, directs 
and distributes, its supply of labour. Only by a hypothesis 
which thus assigns a central industrial purpose to society can 
we possibly understand the life of industry and the complex 
cooperation it displays. 

Take for a single instance the wheat supply of the world — or 
the cotton industry of Lancashire. We see large rhythmic 
actions, elaborate in their complicated flows, responsive to 
innumerable stimuh of world-markets, — a nervous system of 
affluent and effluent currents, directed by the desires and beliefs 
of innumerable producers and consumers, each consciously 
actuated by his own particular motives and yet cooperating 
towards large social ends. 



THE SOCIAL WILL AS AN ECONOMIC FORCE 307 

We can neither grasp, intellectually or emotionally, the human 
or social significance of these processes, if we persist in resolving 
them into the ideas, feelings and actions of individual persons. 
The harmony becomes either fortuitous or purely mystical. 
But, if we regard Society as having a large life of its own, the 
cooperative harmony of individual aims and activities becomes 
a corporate organic process. The social life does not suffer from 
division of labour and specialisation of function, but gains, as in 
the animal organism. The social hfe is not oppressed, degraded 
or injured by the routine of the smaller working lives, any more 
than the animal organism by the regularity and repetition of the 
respiratory, circulating and other routine operations of its organs 
and their cells. 

§ 6. "But," it will be objected, "even if we are Justified in 
pushing the organic analogy so far as to claim the existence of a 
real social life with a meaning and end of its own, superior to 
that of the individual, as the life of every organism is superior to 
that of its organs and cells, that larger social being can only re- 
main a shadowy or hypothetical being to actual men and women. 
And it is the aims, ideas, feeHngs and activities of these little 
units that, after all, will always absorb our attention and occupy 
our hearts and minds." 

Here is the final quintessence of individualism surviving in 
many professing socialists, the denial of the existence of a ra- 
tional moral society. Yet such a society exists. The earliest 
beginnings of animal gregariousness, sexual feelings, and other 
primary instincts of association, with the mutual aid they give 
rise to, are a first testimony to the existence, even at the open- 
ing of the human era, of a real though rudimentary society, 
physical and psychical in its nature. Civilisation has its chief 
meaning in the extension and growing realisation of this unity 
of Society, by utiHsing these secret threads of social feeling for 
the weaving of the fabric of social institutions. Thus, through 
these instruments of common social life, language, art, science, 
industry, politics, religion, society gathers a larger, more soHd 
and various Hfe. Race, Nationality, Church, the bond of some 
common interest in a science, an art, a philanthropic purpose, 
often present intense examples of genuinely common life and 



3o8 WORK AND WEALTH 

purpose. These are not mere social contracts of free individuals, 
seeking by cooperation to forward their individual ends. Such 
a conception of mutual aid is as false for religion, science, art or 
industry, as for politics. The statement that 'man is a social 
animal' cannot merely signify that among man's equipment of 
feelings and ideas there exists a feeling and idea of sympathy 
with other men. That is only how it looks from the standpoint of 
the cell. It means that humanity in all its various aggregations is 
a social stuff, and that whatever forms of coalescence it assumes, 
i. e. a nation, caste, church, party, etc., there will exist a genuinely 
organic unity, a central or general hfe, strong or weak, but, so far 
as it goes, to be considered as distinct from and dominant over 
the life and aim of its members. 

This central life, though distinguishable from the lives of its 
members, as an object of thought and will, is yet only lived in 
and through the Hfe of the organs and cells. This is the subtle 
nature of the organic bond. 

We are told indeed that "Society only exists in individuals." 
This, however, is only true in the same restricted sense in which 
it is true that an animal organism only exists in the life of its 
cells. There is nothing but the cells plus their organic coopera- 
tion. But I should rather say that the organism exists in the 
cooperation of the cells. So I should say that Society exists in 
the cooperation of individuals. 

This is not a matter of theoretic accuracy of statement, but of 
immense practical significance. For the future progress of the 
arts of social conduct, especially of industry and poUtics, must 
largely depend upon the measure and manner of acceptance of 
this view of the nature of Society. It must, indeed, to the in- 
dividual mind always remain as a hypothesis, incapable of full 
and exact verification. For such verification would imply an 
absolute merging of individual personality in the social unity. 
Such a pubHc spirit can never absorb and displace private spirits. 
But the hypothesis may, for all that, possess both intellectual 
and emotional vahdity. Its clear provisional acceptance will 
not only explain many of the difficulties and reconcile many of 
the discrepancies in those tendencies, industrial and political, 
which are generally accepted as making for human progress, but 



THE SOCIAL WILL AS AN ECONOMIC FORCE 309 

will afford increased economy of direction and of motive. For 
once let us realise Society as possessing a unity and a life of its 
own, to the furtherance of which each of us contributes in the 
pursuance of the particular life we call 'our own,' the so-called 
sacrifices we are called upon to make for that larger life will be 
considered no longer encroachments on but enlargements of our 
personality. We shall come in larger measure to identify our 
aims and ends willingly with the aims and ends we impute to 
society, and every step in that public conduct will enrich or 
strengthen that social sympathy which we shall recognise to be 
the very life of society flowing in our veins. This is the spirit 
of social reform, as distinguished from the concrete measures of 
reform. Upon the creation and recognition of this spirit the 
possibility, the usefulness, the durability of every one of the 
institutions and policies, which are evolved by modern civili- 
sation, depend. It is, therefore, of supreme and critical impor- 
tance to obtain the widest possible acceptance of the conception 
of Society as a living being to which each of us ' belongs, ' a being 
capable of thinking and feeling through us for itself, and of de- 
siring, pursuing and attaining ends which are its ends, and which 
we are capable of helping to realise. So long as Society is spoken 
of and thought of as an abstraction, no social conduct can be 
sound or safe. For an abstraction is incapable of calling forth 
our reverence, regard or love. And until we attribute to Society 
such a form and degree of 'personaHty' as can evoke in us those 
interests and emotions which personality alone can win, the 
social will will not be able to perform great works. 

The final claim we make for the human valuation of industry 
presented here is that it helps to bring into clear relief a set of 
human problems which, from the conception of society as a mere 
arrangement for securing individual ends, are perceived to be 
insoluble, but for which reason and emotion alike demand a 
satisfactory solution. Only by substituting for the attainment 
of individual welfare the ideal and the standard of social welfare, 
are we able to obtain a method of analysis and valuation which 
furnishes satisfactory solutions to the problems that industry 
presents. 



CHAPTER XXI 

PERSONAL AND SOCIAL EFFICIENCY 

§ I. What light does our human valuation of economic pro- 
cesses throw upon the conditions of individual and social pro- 
gress? Our examination of industry has shown us the ways in 
which the actual production and consumption of wealth affect 
the personal efficiency and welfare of individuals. The organic 
law of distribution clearly indicates personal efficiency, alike for 
purposes of economic productivity and for the wider art of Kfe, to 
depend primarily upon the maintenance of sound relations be- 
tween the output of economic activities and the income of eco- 
nomic satisfactions. A healthy system of industry will demand 
from each producer an amount and kind of 'costly' labour accom- 
modated to his natural and acquired powers. By such a distribu- 
tion of the socially useful work which is not in itself agreeable to 
its performers, the common economic needs of society are supplied 
with the smallest aggregate amount of human cost. Similarly, we 
see how, by a distribution of wealth according to the needs of each 
member, i. e. according to his 'power' as consumer, the largest 
aggregate amount of human utility is got out of the wealth dis- 
tributed. 

But this burden of 'costly' work, required of the producer and 
adjusted to his powers, is not the only work that he can do. The 
main object of the shorter work-day and the better apportion- 
ment of 'costly' labour, as we have already recognised, is to hb- 
erate the individual so that he has time and energy for the volun- 
tary performance of 'productive' activities that are 'costless,' 
interesting and beneficial to his personal hfe. Some of these 
voluntary activities will be ' economic ' in the sense that they may 
produce goods or services which have an exchange value. Such 
is the gardening or the wood-carving which a man may do in his 
spare time. Though it may bring him a direct return of per- 
sonal gain and satisfaction that is non-economic, it may also be 

310 



PERSONAL AND SOCIAL EFFICIENCY 311 

a supplementary means of income. There is no reason why a 
man whose hobby is his garden should not be able to exchange 
some of the fruit and flowers, which it has been a pleasure for 
for him to grow, for the photographs or the book-bindings on 
which his neighbours may prefer to spend a portion of their 
leisure. Most of the spare energy or leisure, however, won for 
the worker by a fair distribution of 'costly' labour, will, of course, 
usually be appHed to personal employments, to the arts of home 
life and of society, which, though highly conducive to personal 
efi&ciency, lie outside the range of 'economics.' Each person 
would apply this free time and energy differently, his voluntary 
work having some natural relation as 'relief or 'variety' to the 
sort of 'costly' or routine labour which earned his livelihood. 
Thus on this true equalitarian basis there would arise an immense 
variety of freely active personalities. Each person would have 
what may be called a personal standard of production, an orderly 
application of his productive energies, which, though partly im- 
posed by his status as a member of society bound to do his share 
in social work, would largely represent his personal tastes, choices 
and interests, selfish or altruistic, according to his temperament. 
§ 2. Turning to the other side of industry, the distribution of 
wealth to each according to his needs, i. e. capacities of use, per- 
sonalit}^ would impress itself similarly upon an immense variety 
of actual standards of consumption, or modes of applying in- 
come to the satisfaction of desires. There is, however, an im- 
portant distinction to be noted between standards of consump- 
tion and of production. Whereas in modern industry the earning 
of income is normally an individual art, its consumption is nor- 
mally a family act. WTiile the family, except in some agricultural 
societies, is very rarely a unit of production, it remains usually a 
unit of consumption. It would appear, then, that our human 
distribution would affect personal efi&ciency differently upon the 
two sides of its application. As producer his standard of pro- 
duction, or of use of productive activities, would appear to be 
directed by a balance between the social requirements of labour 
and his personal proclivities, whereas on the side of consumption 
the balance would be between the social requirements and the 
family. Society must secure for the standard of family comfort 



312 WORK AND WEALTH 

such an expenditure as will sustain the working numbers of the 
family in full economic efficiency, i. e. a proper economy of what 
the classical economists called 'productive consumption' must 
take place. But, outside this limit, the particular requirements 
and conditions, not of the earner alone, but of the family as a 
whole, must determine the expenditure that makes for efficiency. 
This discrepancy, however, is not really so great as it appears 
at first sight. The direct interest of society in the productive and 
consumptive life of its individual members Hes in their perform- 
ance of this proper share of 'costly' or social service and their 
use of a proper portion of their income for consumption adjusted 
to maintain their efficiency for this social service. The rest of 
their productive energy, the rest of their consumptive wealth, lie 
under their own control for their personal life. The fact that this 
personal life may be more narrowly personal on the productive 
side, more of a family life on the consumptive side, does not 
seriously affect the issue. Indeed, the discrepancy almost wholly 
disappears when we look a little closer at the Uberties which a 
better social economy of production secures for the worker. The 
better life which a slackening of the industrial strain will bring to 
the producer will consist in the cultivation of interests and activi- 
ties which, precisely because they are voluntary and in them- 
selves desired, cannot rightly be classified as either production or 
consumption but unite the qualities of both. We have seen that 
this is the characteristic of all art, or all work which is good and 
pleasant in itself. Any activity that carries a surplus of human 
utility over human cost is at once function and nutrition, produc- 
tion and consumption. In a word, it is an increase of Hfe. So it 
comes about that the 'human distribution' feeds personal effi- 
ciency equally on its productive and consumptive sides. A 
healthy application of productive activities will contribute as 
much to individual progress as a healthy standard of consump- 
tion. 

§ 3. It remains to recognise that the organic treatment of our 
problem does not permit society to adopt a separatist view of the 
distribution of work and its product. A distribution of work 'ac- 
cording to the powers' of workers is conceivable on terms which 
would cause heavy damage to society through ignoring the reac- 



PERSONAL AND SOCIAL EFFICIENCY 313 

tions of work upon consumption. It might appear superficially 
a sound human economy to place all the burden of the heaviest 
and most repellent muscular toil upon classes or races of men 
whose powerful bodies and insensitive minds seemed to indicate 
that they were best fitted by nature for such work.^ But if the 
effect of such an economy were, as it would be, to keep consider- 
able bodies of population in a low grade of animalism, as repre- 
sented in coarse modes of living and brutal recreations, this one- 
sided view, by neglecting these organic reactions, would injure 
the personality of these lower grades of citizens, and through 
them damage the efficiency of the society of which they were 
members. Or, taking an opposite instance, a Society which en- 
abled classes of artistic or Hterary folk to escape all share of 
'costly' social labour, so as to cultivate exclusively their indi- 
vidual activities and tastes, would incur a similar social danger 
through the presence of highly stimulating personalities, un- 
checked by any adequate sense of social responsibilities, who by 
their example and influence might undermine the routine activi- 
ties v/hich are the feeders of social life. 

So far, then, as economic reforms are aiming at personal 
efficiency, they must take simultaneously into consideration the 
effects which each reform will have upon the production and the 
consumption of wealth. For example, a shortening of the work- 
day ought to be accompanied by improved opportunities of edu- 
cation and of recreation as an integral part of the reform. 

§ 4. Our setting of the problem, which brings into contrast the 
routine social production that is 'costly' to individuals and the 
creative or individual production which is ' costless, ' might seem 
to involve the view that social progress, as distinct from indi- 
vidual, would involve an increasing total burden of routine work 
under direct social control. Thus an antagonism between the 
conscious interests of the individual and the social interests might 
appear to remain. For, though a better social will, operating 
upon the individual, might dispose him to accept his duty of 
serving society in the performance of his share of routine work, it 

^ Ruskin had a curious notion of this sort (cf . Time and Tide, par. 107, Munera 
Pulveris, par. 109, Fors Clavigera, Letter Ixxxii), and the recent American 'Scientific 
Management' appears to endorse it. 



314 WORK AND WEALTH 

would still be true that such service was less desirable to him and 
less nourished his personal Kfe than the free personal activities 
upon which it encroached. This opens up an exceedingly import- 
ant issue in social economy. It has been assumed that a really 
enlightened society will so administer industry that a light day's 
labour shared among all will suffice to win the wealth necessary 
for the support of society and the satisfaction of the common 
material needs of its members. Thus an increasing proportion of 
human energy will be Hberated for the performance of those 
activities which are pleasant and interesting to those who engage 
in them. A diminishing amount of time and energy will be ap- 
plied to the mechanical processes of getting food and other ma- 
terials from the earth, and of fashioning them and carrying them 
about. Thus there will be more time and energy for the fine 
arts and crafts, which depend less upon quantity of materials and 
more upon the skilled application of personal powers. From the 
standpoint of human welfare such an economy is obvious. It 
means, on the productive side, a progressive increase of activity 
that is humanly 'costless' and pleasurable, a progressive de- 
crease of that which is costly and unpleasurable. On the con- 
sumptive side, it means the substitution of non-material wealth, 
such as books, pictures, poetry, science, which are virtually in- 
finite in the human utility that they are capable of yielding, for 
material wealth which is mostly consumed in a single act of appro- 
priation. The higher kind of goods thus brings a minimum of 
costs and a maximum of utilities, and that upon each side of the 
organic equation. 

In most advanced nations of our time this gain in the relative 
importance of the arts and professions engaged in artistic, pro- 
fessional, recreative, educational, scientific and other creative 
activities, is recognised as being an evidence and a measure of 
advancing civilisation, and some ofi'set to the advance of material 
luxury. 

§ 5. If, however, there is to be a continuous increase in the 
proportion of time and energy available for the production and 
consumption of the higher grades of non-material economic goods 
and for other activities of a non-economic nature, some limitation 
must take place of the demand and supply of material economic 



PERSONAL AND SOCIAL EFFICIENCY 315 

goods. If in any country, or throughout the industrial world, 
the growth of population were such as, in the old phrase, to press 
' upon the means of subsistence, ' the amount of productive energy 
needed for the arts of agriculture, mining, and the staple branches 
of manufacture and transport would be such as to defeat the 
economy of social progress just indicated. Even if the popula- 
tion did not advance, but were chiefly engaged in seeking fuller 
satisfaction of an increasing number of distinctively physical 
wants, the same result would follow. Larger drafts must con- 
tinually be made upon the natural resources of the soil, by means 
of industries subject to what political economy calls "the law 
of diminishing returns," and an increasing proportion of labour 
must be engaged in these industries. Though mechanics and the 
division of labour in the manufactures, and even in agriculture, 
temper the tyranny of matter, enabling a given amount of rou- 
tine toil to achieve an increasing output of goods, this policy of 
human liberation is impeded and may be entirely frustrated by 
a constant preference among large populations for a strictly quan- 
titative satisfaction of new material wants. The root issue of 
social progress from the economic standpoint is here disclosed. 
It is the question of the relative importance of quantity of matter 
in the satisfaction of wants. In urging that social progress re- 
quires a progressive diminution of the part played by matter 
and the industries in which quantity of matter is a chief deter- 
minant factor, I do not merely mean that civilisation implies an 
increasing valuation of the intellectual and moral faculties and of 
their activities. Most of the fine arts require some matter for 
their manipulation and for their instruments; every branch of the 
intellectual life needs some material equipment. But in these 
occupations and in their products quantity of matter is of an im- 
portance that is slight, often wholly negligible. A fine art, a 
skilled craft, a machine industry, may each handle the same sort 
of material, metal, stone or wood, but the quantity of this mate- 
rial will have a rapidly increasing importance, as one descends 
from the manipulation of the artist to the craftsman and from the 
craftsman to the manufacturer. 

If, then, we are to secure an economy of social progress in which 
relatively less importance is to be given to those industries which 



3i6 WORK AND WEALTH 

are less humanly desirable, alike in the work they involve and in 
the satisfaction their products yield, we must have a society 
which becomes increasingly quahtative in its tastes and interests 
and in its human constitution. A larger proportion of its real 
income must take shape in non-material goods, or in material 
goods which depend more for the satisfaction they yield upon 
their quaUty. In a word, there must be a tendency to keep life 
simple in regard to material consumption. 

But when one says that society itself must grow more qualita- 
tive in its constitution, a more difficult consideration emerges. 
In the discussion regarding the bearing of the growth of popula- 
tion upon general welfare too much attention was formerly ac- 
corded to the merely quantitative question. Too little is now 
accorded. Under the title of eugenics the population question 
threatens to become entirely qualitative. Now this is evidently a 
mistake. For whatever interpretation we accord to social welfare, 
some consideration as to the desirable number and rate of growth 
of the population is evidently of importance. Though it may be 
agreed that vital values in their spiritual and even in the physi- 
cal meanings are distinctly qualitative, and that, as far as pos- 
sible, a society should set itself to maintain conditions of sex se- 
lection favourable to admittedly finer and healthier types, this 
issue of quality must not be detached from the issue of quantity. 
As in the economy of the individual life a proper allowance of at- 
tention must be secured for physical wants and for the material 
production and consumption they involve, so in a society the size 
of its physical structure, the number of cooperating human cells 
through which it lives, is a consideration that inheres in the art 
of social life. Ruskin was surely right in his general setting of the 
social question 'How can society consciously order the lives of 
its members so as to maintain the largest number of noble and 
happy human beings?'^ How much consciousness or calculation 
can advantageously be brought to bear upon the regulation of the 
play of the sexual and related instincts and desires, is a highly 
controversial question into which we need not enter here. But 
so far as social reform can make good any claim to regulate the 
growth of the population, its regulation should clearly have re- 

^ Time and Tide, par. 123. 



PERSONAL AND SOCIAL EFFICIENCY 317 

gard to quantity as well as quality. A large number of physi- 
cally sound and happy human beings must be taken as a prime 
condition of social welfare. It is not easy to defend the prosper- 
ity of a people who shall seem to purchase a fuller and even a 
more spiritually complex life for some or all their members by a 
continuous reduction of their numbers. Where life is valued and 
valuable the natural disposition to extend its values as widely as 
is consistent with their maintenance is a natural instinct difficult 
to impugn. If it be contended that this is in some sense an ad- 
mission of the social validity of the tendency to multiply so as to 
' press on the means of subsistence, ' I might admit the interpre- 
tation, provided it were understood that 'means of subsistence' 
included all the essentials of spiritual as well as of physical life. 
I do not, however, wish to dogmatise upon a difficult and exceed- 
ingly debateable matter, but only to insist that a conscious art of 
social progress can no more ignore quantity than quality of popu- 
lation in any general calculus of human welfare. 

§ 6. The greater equalisation of incomes which would follow 
from the absorption of unproductive surplus into public income 
and into remuneration of labour, would be favourable to the two 
conditions of social progress here laid down, a restriction upon 
the growth of material consumption and a reasonable regulation 
of the growth of population. For, as luxury and material waste 
are seen largely to arise as instruments for the display of individ- 
ual prowess in competitive industry, the removal of that compe- 
tition from fields which yield large means for such display would 
necessarily quench the zest which it exhibits, as well as stop the 
sources of such extravagant expenditure. For when profuse dis- 
play of material apparatus is no longer possible, the natural de- 
sire for personal distinction, which is the deepest-rooted of all per- 
sonal desires, will tend more and more to find expression in those 
arts of refined living which are more truly personal in that they 
cause the more intellectual and spiritual qualities of personality 
to shine forth. If, for the quantitative display of material 
goods, there can gradually be substituted a quaUtative dis- 
play of spiritual goods, this change will be attended by a cor- 
responding change in economic activities. There will be a re- 
duction in the coarser forms of productive energy making large 



3i8 WORK AND WEALTH 

drafts upon the material resources of nature, and an increase ot 
the higher forms of energy whose drafts on these material re- 
sources are relatively small. 

The proportion of non-material to material wealth will increase, 
and there will be a corresponding increase in the proportion of 
productive activities that contain large factors of creative in- 
terest. Every enlargement of the scope for free individual ex- 
pression through economic demand, even for purely material 
goods, will have a necessary effect in curbing the dominion of ma- 
chinery and of routine labour. For social arrangements which 
enable and incite each consumer to seek a more personal satis- 
faction of his individual needs will force producers to study these 
individual needs and satisfy them. This cannot be done by mere 
machine-economy, which rests upon the opposite hypothesis that 
large numbers of consumers will consent to sink their individual 
differences of need and taste accepting certain routine forms of 
goods which do not exactly meet the requirements of any one of 
them. It is, therefore, reasonable to expect that a more equal 
and equitable distribution of income will evoke in the masses of 
population, who now consent to consume common 'routine' 
goods because they cannot afford to consult their particular 
tastes and preferences, a more personal and discriminative de- 
mand, which will set strict limits upon the machine economy and 
call for a larger application of individual skill in the various crafts. 
Or if, valuing more highly as fields for personal expression the less 
material elements in their standard of living, they still consent to 
utilise routine industry for the satisfaction of their common phys- 
ical needs, they will apply an increasing proportion of their in- 
terests and their incomes to the acquisition and enjoyment of 
those goods, artistic, intellectual, emotional, which are more 
ennobling alike in their production and their consumption. 

§ 7. A final word upon population. Is there not reason to be- 
lieve and hope that this sounder distribution of work and wealth 
will contribute to a satisfactory solution both of the quantitative 
and the qualitative population question? If women were no 
longer forced by economic pressure into marriages for which they 
had no natural inclination, much unfit parentage and much in- 
competent nurture would be averted. If they were free to live 



PERSONAL AND SOCIAL EFFICIENCY 319 

unmarried, or to choose the father of their children and the size 
of their family, the normal current of those instincts making for 
the preservation and instinct of the race, obstructed by artificial 
barriers of economic circumstances, would be restored to their 
natural course. If the support of a young family were no longer 
a heavy and injurious strain upon the economic resources of the 
parents and their future career a grave anxiety, the human love of 
children and the attractions of a complete home life would proba- 
bly check that rapid decline of the birth-rate which to many is 
one of the darkest features of our present order. It would not, 
indeed, restore the reckless propagation of former times which 
imposed on parents, and chiefly upon the mother, a burden in- 
jurious in its private incidence and detrimental to society. But 
while the better economic order would stop compulsory mar- 
riages and undesired and therefore undesirable offspring, it 
would restore the play of the normal philoprogenitive instincts. 
The net effect would seem to be some retardation of the de- 
cline of birth-rate in those types of families where the condi- 
tions, physical and psychical, appear favourable to good nature 
and good nurture for children, and a positive elimination of cer- 
tain types of union unfavourable to sound offspring. The to- 
tal effect upon the quantitative issue would of course depend upon 
the balance between this freer play of the philoprogenitive in- 
stinct and the other influences, not directly affected by economic 
causes, which make for smaller families. But that the quality 
or character of the population must be improved by the more 
natural play of the rejective and selective influences here indi- 
cated can hardly admit of controversy. Indeed, it may well be 
urged that the crowning testimony to the validity of the human 
law of distribution will consist in the higher quality of human 
life it will evoke by liberating and nourishing the natural art of 
eugenics in society. 



CHAPTER XXII 

SOCIAL SCIENCE AND SOCIAL ART 

§ I . The task of a human valuation of industry involved at the 
outset the arbitrary assumption of a standard of value. That 
standard consisted in a conception of human well-being appli- 
cable to the various forms of human life, man as individual, as 
group or nation, as humanity. Starting from that conception of 
the health, physical and spiritual, of the individual human or- 
ganism, which is of widest acceptance, we proceeded to apply the 
organic metaphor to the larger groupings, so as to build up an in- 
telligible standard of social well-being. This standard, at once 
physical and spiritual, static and progressive, was assumed to be 
of such a kind as to provide a harmony of individual welfares 
when the growing social nature of man was taken into due 
account. 

With the standard of human well-being we then proceeded to 
assign values to the productive and the consumptive processes of 
which industry consists, examining them in their bearing upon 
the welfare of the individuals and the societies engaging in them. 

Now this mode of procedure, the only possible, of course in- 
volved an immense peiitio principii. The assumption of any close 
agreement as to the nature of individual well-being, still more 
of social well-being, was logically quite unwarranted. 

Economic values have, indeed, an agreed, exact and measur- 
able meaning, derived from the nature of the monetary standard 
in which they are expressed. Now, no such standard of the hu- 
man value of economic goods or processes can be established. 
Yet we pretended to set up a standard of social value and to apply 
a calculus based upon it, claiming to assess the human worth 
w^hich underHes the economic costs and utilities that enter into 
economic values. 

Has this procedure proved utterly illicit? I venture to think 
not. Though at the outset our standard was only a general phrase 

320 



SOCIAL SCIENCE AND SOCIAL ART 321 

committing nobody to anything, the process of concrete applica- 
tion, in testing the actual forms of work and wealth which make 
up industry, gave to it a continual increase of meaning. While 
the widest divergence would be found in the formal definitions of 
such terms as "human welfare" or "social progress," a large and 
growing body of agreement would emerge, when a sufficient num- 
ber of practical issues had been brought up for consideration. The 
truth of our standard and the validity of our calculus are estab- 
lished by this working test. It is not wonderful that this should 
be so, for the nature and circumstances of mankind have so much 
in common, and the processes of civilisation are so powerfully as- 
similating them, as to furnish a continually increasing community 
of experience and feeling. It is, of course, this fund of 'com- 
mon sense' that constitutes the true criterion. The assumption 
that ' common sense ' is adequate for a task at once so grave and 
dehcate may, indeed, appear very disputable. Granting that 
human experience has so much in common, can it be claimed that 
the reasoning and the feeling based on this experience will be so 
congruous and so sound as to furnish any reliable guide for con- 
duct? Surely 'common sense' in its broadest popular sense can 
go a very little way towards such a task as a human interpreta- 
tion of industry. 

There is no doubt a good deal of force in this objection. If we 
are to invoke ' common sense ' for the purposes of an interpreta- 
tion or a valuation, it must evidently be what is termed an 
' enlightened common sense. ' And here at once we are brought 
into danger lest enlightenment should not supply what is re- 
quired, viz., a clearer or more fully conscious mode of common 
sense, but a distorted or sophisticated mode. How real this 
danger is, especially in the conduct of public affairs, may be re- 
cognised from the excessive part played by certain highly con- 
scious and over-vocal interests of the commercial and intellect- 
ual classes in the art of government. The most pressing task of 
civilisation in the self-governing nations of our time is so to spread 
the area of effective enlightenment as to substitute the common 
sense of the many for that of the few, and to make it prevail. It 
is this common sense, more or less enhghtened, that the disin- 
terested statesman takes for the sanction of his reading of the 



322 WORK AND WEALTH 

general will which he endeavours to express in the conduct of 
public affairs. That it is never at any time a certain, a perfectly 
coherent, a precise criterion, will be readily admitted. But that 
it is sufficiently intelligible, sufficiently sound, is the necessary 
presupposition of all democratic statecraft. And, so far as it is 
thus serviceable, it supphes a valid standard and a valid calculus 
of social values. Though the reading of this standard and the 
application of this calculus will always be subject to some bias 
of personal idiosyncrasy, the weight of the general judgment 
commonly prevails in the more important processes of social 
valuation. 

But, in pinning our faith to enlightened common sense for an 
interpretation or valuation of industry, we must not allow our- 
selves to be deceived as to the amount of 'scientific accuracy' 
which attends such a procedure. While this standard can and 
must supply the rules and measurements which we apply in the 
processes of detailed analysis and comparison by which we esti- 
mate the costs and utilities and the net human values of the va- 
rious industrial activities and products, we must not put into this 
standard a stability it does not possess, or into the quantitative 
methods it uses an authority for social conduct which they are 
inherently disqualified from yielding. 

§ 2. The science and art of society have suffered so much from 
want of exact and measured information that it is only right and 
natural for immense importance to be attached to the collection of 
masses of ordered and measured social facts. If a sufficient num- 
ber of trained investigators could be set to work to gather, meas- 
ure, sift and tabulate, the various orders of crude fact relating to 
the employment, wages, housing, expenditure, health, thrift, edu- 
cation, and other concrete conditions of the poorer grades of town 
and country dwellers, it seems as if a number of accurate and 
valid generalisations would emerge by clear induction upon which 
could be constructed an absolutely scientific treatment of poverty. 
Or, again, to take a narrower and more distinctively economic 
issue, that of the shorter working day. If a careful series of ob- 
servations and experiments could be made in a number of rep- 
resentative businesses, as to the effect upon the size, cost and 
quality of output produced by given reductions in the hours of 



SOCIAL SCIENCE AND SOCIAL ART 323 

labour among various classes of workers, it might appear as if an 
accurately graded social economy of the working day could be 
attained by calculations. 

But though statesmen, philanthropists and reformers are more 
and more influenced in their judgments and poKcies by these 
measured facts, no safe mechanical rules for the guidance of their 
conduct in any social problem can be based upon them. The 
facts and figures which appear so hard and so reliable are often 
very soft and ineffective tools for the social practitioner. There 
are several defects in them regarded as instruments of social prog- 
ress. 

It is hardly ever possible to prove causation by means of them. 
You may obtain the most exact statistics of housing conditions 
and of death-rates for the population of a group of towns, but you 
cannot prove to what extent ' back to back ' houses affect infant 
mortaHty. No figures professing to measure the causal connec- 
tion between drink and crime or insanity, income and birth-rate, 
or any other two social phenomena, possess the degree of validity 
they claim. Why? Because you can never isolate the factors 
completely in any organic or social problem, and you can never 
know how far you have failed to isolate them. You may, indeed, 
by varying the conditions of your experiments or observations 
sufficiently, obtain practical proof of organic causation, but you 
can seldom express this causation in terms of any quantitative 
accuracy. Still more is this true of psychological and social prob- 
lems. A purely descriptive science of society may attain a con- 
siderable degree of quantitative accuracy, but the laws expressing 
the causal relations of these measured facts will always lack the 
certainty of operation and the measurabihty of action belonging 
to the laws of chemistry and physics. 

Now the chief facts with which the statesman and the social 
reformer are concerned in forming judgments and poHcies are 
these laws of causal relation, and not the crude measured facts 
that constitute the raw material of statistics. This comparative 
inexactitude or lack of rigidity in the laws of social science con- 
stitutes the first difficulty in applying the science to the art of 
social conduct with the same amount of confidence with which 
the laws of physics and chemistry are apphed to the mechanical 



324 WORK AND WEALTH 

arts. But another difficulty quite as grave as this want of rigidity 
in social facts is the instability of the standard. In all processes 
of physical measurement it is customary to make allowances for 
errors due to what is called 'the personal equation,' abnormali- 
ties of observation in the experimenter. But the standard of 
human valuation, the enlightened common sense of a community, 
applied to interpret social phenomena in terms of 'utility' or 
'welfare, ' will evidently be subject to much wider variations, and 
the interpretation of this standard by statesmen, or other indi- 
vidual agents of society, will be subject again to wide errors of 
personal bias. 

Illustrating from the economic sphere which is our concern, 
that specialisation of industrial life which has made three quarters 
of our population town-dwellers and is making our nation con- 
tinually more dependent upon foreign supplies of food, will have 
a very different value set on it by the narrower nationalism 
which believes the interests and ambitions of nations to be ir- 
reconcilable, and by the wider political outlook which conceives 
the economic interdependence of nations as in itself desirable and 
as the best guarantee of national security. Or again, a difference 
of view or sentiment regarding the relative worth of the personal 
qualities of enterprise and self-reliance on the one hand, of plod- 
ding industry and sociality upon the other, must materially af- 
fect the values given to such phenomena as emigration, pubHc 
provision against unemplo5mient, copartnership, taxation of high 
incomes or inheritances. Indeed it is quite manifest that with 
every difference of the range of sympathy and imagination the 
meaning which enlightened common sense will give to social 
welfare, and to every fact submitted to this test, will vary. 

These considerations may seem at first sight to invahdate the 
entire purpose of this book, the endeavour to apply a social cal- 
culus for the valuation of industry. So long as the cost and 
utility of economic material and process is expressed in terms 
of money, you have a fixed standard capable of yielding exact 
valuations. Endeavour to resolve this cost and utility into terms 
of human welfare or desirability, you appear to have adopted a 
fluctuating standard that can give no serviceable information. 

§ 3. The truth, of course, is that a scientific valuation of any- 



SOCIAL SCIENCE AND SOCIAL ART 325 

thing can only proceed by way of quantitative analysis. A 
standard of valuation which should regard qualitative differences 
as ultimate would not be scientific at all. It might be aesthetic 
or hygienic or ethical, according to the nature of the qualitative 
differences involved. A strictly scientific valuation of wealth, or 
of cost or of utility, or of life itself, must apply a single standard 
of measurement to all the various objects it seeks to value, i. e. it 
must reduce all the different objects to terms of this common 
denominator. It can measure and value all forms of purchasable 
goods or services, however various in nature, through the market 
processes which reduce them to a single monetary equivalent. It 
can measure and value labour-costs of different sorts, either by 
a monetary standard or by some measure of fatigue or vital ex- 
penditure. It can measure the utility of various sorts of food or 
of fuel, by comparing the quantities of working-power or output 
which upon an average they yield. It can ascertain the vital 
values of different towns and occupations, incomes, races, in 
terms of longevity, fertility, susceptibility to diseases, etc. 

This method, essential to scientific analysis, rests on an assump- 
tion that £1 worth of bad books is of the same value as £1 worth 
of good books. This assumption is true for the purpose to which 
it is applied, that of a market valuation. It assumes that a year's 
life of an imbecile or a loafer is worth the same as a year's life of 
a saint or a genius, and so it is for the purpose of vital statistics. 

This is of course universally admitted. Science proceeds by 
abstraction: it does not pretend to describe or explain the indi- 
viduality or particular qualities of individual cases, but to dis- 
cover common attributes of structure or composition or behav- 
iour among numbers of cases, and to explain them in terms of 
these common characters. 

So far, then, as the so-called value of anything, or any happen- 
ing, consists in its uniqueness or idiosyncrasy, this value neces- 
sarily evades scientific analysis. It is only the common proper- 
ties, the regularities, the conformities, that count for scientific 
valuation. Nay, more. So far as science takes account of indi- 
vidual quaHties, it is in the capacity of eccentricities, i. e. it 
measures the amount of their variation from the average or normal. 
It cannot entertain the notion that there is any sort of difference 



326 WORK AND WEALTH 

which is inherently immeasurable, i. e. that there is difference 
in kind as well as in degree.^ 

§ 4. A scientific analysis treats all differences as differences of 
degree. So-called difference of quality or kind it either ignores, 
or it seeks to reduce them to and express them in differences of 
quantity. This endeavour to reduce qualitative to quantitative 
difference is the great stumbling-block in all organic science, but 
particularly in the departments of psychology and sociology. The 
difficulty is best illustrated in the recent extension of quantitative 
analysis into economics by the method of marginal preferences. 
Not content with the assumption that the particular costs, con- 
sumable qualities, etc., of any two articles selHng for £1 each may 
be disregarded, and the single property of their market value 
abstracted for consideration, the mathematical economists now 
insist that the study of marginal preferences discloses impor- 
tant laws of the psychology of individuals and societies. 

The whole process of expenditure of income appears to be 
replete with instances of the capacity of the human mind to 
measure and apply a quantitative comparison to things which 
seem to be different in kind. It might seem as if my desire to help 
the starving population of India in a famine, and my desire to 
attend a Queen's Hall concert this evening were feelings, not 
merely of different intensity, but of such widely different nature 
that they could not be accurately measured against each other. 
And yet this miracle is said to be actually performed, when I 
decide upon due consideration to divide the js 6d in my purse so 
as to give 55 to the Famine Fund and to buy a 2s 6d ticket for the 
concert, instead of the more expensive ticket I should have 
bought had I not been lured to the Famine meeting. I might 
have given the whole ys 6d to the Famine Fund, and missed the 
concert. Why did I not? I must have performed the very deli- 
cate spiritual operation of reducing my humanitarian feeling to 
common terms with my love of music, and to have struck a 
balance which can only mean that I consider the additional satis- 

^ It was precisely on this rock that J. S. Mill's utilitarianism split. He tried to 
incorporate in the quantitative calculus of Benthamite pleasure and pain distinc- 
tions of the quality or worth of different sorts of pleasure and pain, and failed to 
furnish any method of reducing them to common terms. 



SOCIAL SCIENCE AND SOCIAL ART 327 

faction I would have got from giving another 2s 6d to the Famine 
Fund to be a little less than the satisfaction I would get from the 
concert. But this, of course, is a single crude instance of a far 
more elaborate process of comparison which underlies the whole 
expenditure of my income. After the routine expenditure upon 
necessaries and comforts, which may be said to represent my 
habitual standard of consumption, has been defrayed, there are 
various attractive uses to which every other sovereign and shil- 
ling may be put. All sorts of different appeals of pleasure, duty, 
pride, press their claims through a thousand different channels. 
In order to apportion my expenditure as I do, I must be conceived 
as reducing all these claims to some common standard of desir- 
ability, and deciding how much to lay out on this, how much on 
that. That physical satisfactions can be compared with one 
another, by the application of some standard of pleasure may 
appear intelligible enough. But that a sense of moral duty can 
be brought into direct comparison with a physical pleasure, or 
that various duties can be compared in size or strength with one 
another, v/ould seem almost impossible. Yet this is done inces- 
santly and quickly, if not easily. Even when it is claimed that 
some duties are so paramount that a good man will refuse to 
'weigh' any other claim against them, assigning them a value 
which, he says, is 'infinite,' the marginal economist will not 
admit the claim to exemption. ' This only means that to him the 
total difference between the command of things in the circle of 
exchange that he already enjoys, and an indefinite, or unlimited 
command of them, does not weigh as heavy in his mind as the dis- 
honour or the discomfort of the specific thing he is required to do. 
It does not mean that his objection is ''infinite." It merely 
means that it is larger than his estimate of all the satisfaction 
that he could derive from unHmited command of articles in the 
circle of exchange, and this is a strictly, perhaps narrowly, limited 
quantity. ' ^ 

But though there are men whose honour is so incorruptible as 

always to 'outweigh' other considerations, the ethics of bribery 

make it clear that a weaker sense of honour can be measured 

against material satisfaction, and that is all that seems necessary 

^ Wicksteed, Common Sense of Political Economy, p. 405. The italics are mine. 



328 WORK AND WEALTH 

to support the view that such qualitative distinctions can ' be re- 
duced to questions of quantity.' Nor is it merely a matter of the 
monetary valuation through expenditure of incomes. Precisely 
the same problem arises in the disposal of one's time or energy. 
How much shall be given to the performance of this or that per- 
sonal or family duty, to recreation, or to study? In what propor- 
tions shall we combine these activities? If a curtailment of money 
or of time is necessary, how much shall be taken from this, how 
much from that employment? 

But it is needless to multiply examples. When any scientific 
valuation is taken, all qualities are abstracted and quantities 
only are compared and estimated. As in economics, so in ethics. 
The moral struggle to resist a temptation is nearly always set in 
scientific psychology as a mechanical problem, for when the ethi- 
cist professes to introduce some imponderable 'freedom of the 
will ' he has to throw overboard his science. A ' conflict of duties,' 
as Mr. Wicksteed recognises, implies that 'duty itself is a quanti- 
tative conception. ' ^ 

§ 5. Similarly with the scientific poKtician who seeks to make 
full use of quantitative analysis. He too is compelled to visu- 
alise and represent the psychological operation through which a 
political judgment is reached as a mechanical one, conceived in 
terms of size, weight, strain or intensity. In his Human Nature 
in Politics Mr. Graham Wallas gives a very interesting example 
of the scientific valuation of a process of political thinking, viz. 
the process by which Mr. Gladstone, in the autumn and winter 
of 1885-6, must be conceived to have arrived at his Home Rule 
policy, ' thinking incessantly about the matter' and 'preparing 
myself by study and reflection, ' 

After describing, with the aid of Lord Morley's Life, the 
various studies and courses of reflection employed, the 'calcu- 
lations' of the state of feeling in England and Ireland, the exami- 
nation of various types of federation, as found in past and current 
history, the statistical reports upon finance, law and other con- 
crete issues, considerations of the time and opportunity, the 
play of the emotional valuations, 'the irresistible attraction for 
him of all the grand and external commonplaces of liberty and 

ip.409. 



SOCIAL SCIENCE AND SOCIAL ART 329 

self-government,' Mr. Wallas sees the results of all this acquisi- 
tion of knowledge and reflection gathering and being coordinated 
into a problem in which the factors are quantities and the solu- 
tion 'a quantitative solution/ 'a delicate adjustment between 
many varying forces.' ^ 'A large part of this work of complex 
coordination was apparently in Mr. Gladstone's case uncon- 
scious,' an operation he declares, 'rather of art than of science.' 
Now, since ' the history of human progress consists in the gradual 
and partial substitution of science for art,' it is desirable to bring 
out with clearer consciousness, and fortify with greater accuracy 
of knowledge, the processes of political thinking. ' Quantitative 
method must spread in politics and must transform the vocabu- 
lary and the associations of that mental world into which the 
young politician enters. Fortunately, such a change seems at 
least to be beginning. Every year larger and more exact col- 
lections of detached political facts are being accumulated; and 
collections of detached facts, if they are to be used at all in po- 
litical reasoning, must be used quantitatively.' ^ Since the prob- 
lems of political conduct are thus essentially quantitative, they 
can, in theory at any rate, be 'solved' by science. 'The final 
decisions which will be taken either by the Commons — or by 
Parliament in questions of administrative policy and electoral 
machinery must therefore involve the balancing of all these and 
many more considerations by an essentially quantitative proc- 
ess.^ 

§ 6. Now how far is it true that any political problem is essen- 
tially quantitative and soluble by a quantitative process? It is 
of course to be admitted at once that the science of statistics 
^ will feed a statesman's mind with a variety of ordered and meas- 
ured facts. But will this mind, working either scientifically or 
artistically, consciously or subconsciously, go through a dis- 
tinctively mechanical process of balancing and measuring and 
register a quantitative judgment? A scientific setting of the 
process must indeed so present it. But, then, a scientific setting 
of any process whatsoever sets it thus in purely quantitative 
form. The real issue is how far this scientific setting is competent 
to interpret and explain the facts, and to deliver a judgment 
^ P. 153. " P. 156. ' P. 159. The italics are mine. 



330 WORK AND WEALTH 

which shall be authoritative for the conduct of an individual or a 
society. 

In order to test the scientific claim let us take what seems to 
be a very different sort of action from that of the politician or 
the business man, that of the artist. Follow the mind of the 
painter as he plies his art. Each of his operations too involves 
considerations of quantity and measurement, scope and focus, 
adjustment, coordination, balance, the application of definite 
blends of colours: optics, anatomy, and other sciences feed his 
mind with exact knowledge. A delicate adjustment of quantities 
in line and colour is involved in every part of his artistic operations. 
But does the operation consist of these quantitative arrangements 
and can it be understood or 'appreciated' by analysing them? 
Evidently not. Why not? Because in such an analysis or ex- 
planation the essentially qualitative or creative action of the 
artist, which gives unity and artistic value to the whole operation, 
escapes notice. Science kills in order to dissect. So in the case 
of every other art. A poem involves certain ordered arrange- 
ments of sound which may be expressed in quantitative terms of 
rhythm and prosody. But any attempt to 'resolve' it into these 
forms loses its spirit, its unity, its value as a poem. Students of 
the drama have sometimes explained or interpreted a tragedy of 
Sophocles or Shakespeare in terms of the gradation of intensity 
of the various emotions involved, the length of pauses of suspense, 
the balancing, rehef and interlacing of the plots or episodes, the 
relative strength or height of the chmaxes and subcHmaxes, the 
growing rapidity of movement towards the catastrophe. But can 
it be pretended that this 'mechanics' of the drama can furnish a 
standard of appreciation, or supply laws according to which a 
'good' drama may be constructed or appreciated? No. An 
artistic operation is essentially organic, creative and qualitative. 
None of these characters can really be reduced to quantity. 
Science by quantitative analysis can only deal with the skeleton 
not with the life that informs it. 

I think this eternal inabihty of science adequately to interpret 
value, or explain a work of art, will be generally admitted. It is 
due to the fact that this work and its value are inherently inca- 



SOCIAL SCIENCE AND SOCIAL ART 331 

pable of being reduced to quantities. The difference between one 
picture and another, one poem and another is a difference of 
quaHty. It is of course true that by a merely linguistic necessity 
we often speak of a picture as being 'much' finer than another, 
and compare the 'greatness' of one poet with that of another. 
But we are aware all the time that we are really comparing un- 
likes, dealing with quahtative differences. On no other sup- 
position indeed can we understand the valuation set upon a work 
of genius as compared with one of talent. 

" Oh the little more, how much it is, 
And the little less what worlds away." 

What then do economists mean when they insist that quali- 
tative differences, the desires and satisfactions which have such 
widely diverse origins and natures, can be weighed and measured 
against one another, and that problems of industry are essentially 
and ultimately quantitative? Our examination of artistic activ- 
ities has shown that in each case quantities are involved, but 
that in no case do quantities constitute the problem of action. 
But how, it may be said, do you dispose of the admitted facts 
that by means of monetary valuations these diverse desires and 
satisfactions are reduced to a common standard, are compared, 
and that a course of conduct is apparently based upon these 
quantitative considerations? 

The answer is that this is an entirely illusory account of the 
psychical process by which a man lays out his money, or his time, 
or his energy. He does not take the several uses to which he 
might apply the means at his disposal, reduce them, in thought 
or in feeling, to some common term, and so measure the amount 
he will expend upon each object that the 'marginal' or 'final' 
portion of each use shall be exactly equal in the utility it yields. 
The 'marginahst' ^ is correct in saying that the utility imputed 
to the last sovereign I expend on bread during the year must be 

^ This older doctrine of marginalism, concerned with the comparison of marginal 
utilities, or marginal costs, in the application of expenditure of productive energy, 
must not be confused with the novel doctrine which we discussed in Chapter XI 
in relation to wages. In the newer doctrine any unit of a supply may be regarded as 
the marginal unit and every unit as equally productive or useful. According to the 
older doctrine each unit has a different cost or utility. 



332 WORK AND WEALTH 

considered to be neither greater nor less than that imputed to the 
last sovereign's worth of tobacco, or books, holiday or charitable 
subscriptions. In precisely the same sense it is true that the last 
brushful of green and brown and Turkey red expended on a pic- 
ture has the same art- value to the painter. 

Perhaps the issue can be made clearer by reference to an art 
usually considered less 'fine' and more closely affected by quanti- 
tative considerations than painting, the culinary art. The com- 
position of a dish is here expressed in proportions of its various 
ingredients, so much flour, so many ounces of raisins, so many 
eggs, so much sugar, etc. The marginalist would dwell upon the 
crucial fact that the last pennyworth of the flour, raisins, eggs 
and sugar, taken severally, had an equal value for the pudding, 
and that these marginal or final increments were in some way 
causal determinants of the composition of the pudding, because 
in using the ingredients the cook took care to use just so much of 
each, and neither more nor less. And it is quite true that the 
delicacy of the culinary art will in fact be displayed in deciding 
whether to put in another handful of raisins, another egg, or a 
spoonful more sugar. But, from the standpoint of trying to ap- 
preciate the virtue or worth of the dish as a culinary creation, it 
cannot be admitted that any special importance or causal deter- 
mination attaches to the last increments of the several ingre- 
dients. For it is evident that the 'how much' and therefore the 
'margin' of each ingredient is itself determined by the conception 
of the tout ensemble in the mind of the creator or inventor. 

And this evidently applies to every form of composition em- 
bodying some unity of design or purpose, whether the treatment 
of a subject in pictorial or dramatic art, the making of a new dish, 
the construction of a machine, the arrangement of a business, or 
the laying out of a garden or a fortune. So far as an economical 
use is made of materials or means of any kind for the attainment 
of any end this marginal equivalence is implied. The scientific 
analysis of any com_posite arrangement, mechanical, organic, 
conscious, involves this marginal assumption. It is an axiom of 
all 'economy' whatsoever. 

But it explains nothing. Nay, in dealing with any organic be- 
ing on any plane of action, it darkens counsel. It does so in sev- 



SOCIAL SCIENCE AND SOCIAL ART 333 

eral ways. First by assuming or asserting that the human mind 
can and does get rid of quahtative differences by referring them 
to a quantitative standard: secondly, by assuming or asserting 
that organic unity can be broken up into its constituent parts and 
explained in termxS of these measured parts; thirdly, by assuming 
or asserting a uniformity of nature which conflicts with the 
'novelties' in which creative energy expresses itself. All these 
fallacies are just as much involved in the attempt to explain the 
expenditure of an income as a purely quantitative problem, as in 
the attempt to explain the art-value of a picture in terms of the 
respective quantities of line and colour. In each case the root- 
fallacy is the same, the illicit substitution of the abstract ' quan- 
tity ' for the actual stuff, which is always qualitative and is never 
identical in any two cases, or at any two times. 

§ 7. In laying out my income, I do not in fact compare all my 
several needs or tastes, and having assigned so much utility or 
desirability to each, plan my expenditure so as to spend on each 
just as much as it is worth, equahsing all expenditure at the mar- 
gins so as to maximise the aggregate. Even Benjamin Franklin or 
Samuel Smiles would not really do this, though they might think 
they did, and perhaps draw up schedules to enforce the notion. 
So far as I act like a free, rational being, not a creature of bHnd 
custom or routine, I employ all my personal resources of knowl- 
edge, taste, affection, energy, time, and command of material 
resources, in trying to reahse my ideal of a good or desirable life. 
In the execution of this design, however it be regarded, self- 
realisation or career, I utiHse my various resources in a manner 
strictly analogous to that in which the artist employs the mate- 
rials and instruments of his art. Upon the canvas of time I paint 
myself, using all the means at my disposal to realise my ideal. 
Among these means is my money income. Its expenditure goes 
into the execution of my design. So far as I am justified in sepa- 
rating my expenditure of money from the expenditure of my 
time and other resources, and in regarding the design as an ' eco- 
nomic picture,' I can readily perceive that the unity of my artis- . 
tic purpose involves and determines the expenditure of my in- 
come in definite proportions upon the various objects whose 
* consumption ' contributes to the design. But these proportions 



334 WORK AND WEALTH 

are not determined by a calculation of the separate values of the 
various items. For, strictly speaking, they have no separate 
value, any more than have the lines or colours in a picture. Only 
by consideration of what we may term indifferently the artistic 
or organic purpose of the whole can a true appreciation or valua- 
tion be attained. The full absurdity of suggesting that anything 
is learned, either in the way of valuation or of guidance, by the 
quantitative analysis, or the wonderful discovery of equivalence 
of value at the margins, will now be apparent. This mathemati- 
cal analysis can do no more towards explaining the expenditure 
of income than explaining the expenditure of paint. Of course, 
the expenditure at the margins appears to produce an equal 
utility: that truth is obviously contained in the very logic of the 
quantitative analysis. But that quantitative analysis, neces- 
sarily ignoring, as it does, the qualitative character which the 
organic unity of the v;hole confers upon its parts, fails to perform 
the psychological interpretation claimed for it. 

So far as it is true that the last sovereign of my expenditure in 
bread equals in utility the last sovereign of my expenditure in 
books, that fact proceeds not from a comparison, conscious or 
unconscious, of these separate items at this margin, but from the 
parts assigned respectively to bread and books in the organic 
plan of my life. Quantitative analysis, inherently incapable of 
comprehending qualitative unity or qualitative differences, can 
only pretend to reduce the latter to quantitative differences. 
What it actually does is to ignore alike the unity of the whole 
and the qualitativeness of the parts. 

Nor is this all. It is not even true that an application of quan- 
titative analysis does find exact equivalence of values at the mar- 
gins. Taking a concrete instance, it is not true that the last sov- 
ereign of my expenditure in books equals, or even tends exactly 
to equal, in utility, that of my last sovereign's expenditure on 
bread. This would be the case if the future tended precisely to 
repeat the past. In that event my experience of the economy of 
last year's expenditure would progressively correct any errors, 
and I should come to employ my resources with greater economy 
or exactitude to the attainment of the same design. But I am 
not the same this year as last, my environment is not the same, 



SOCIAL SCIENCE AND SOCIAL ART 335 

my resources are not the same, and the plan of life I make will 
not be the same. This awkward factor of Novelty, involved in 
organic nature, belongs to every creative art, being indeed of the 
very essence alike of art and of creation, and impairs to an in- 
calculable extent the quantitative calculus and its marginal in- 
terpretation. An addition of £100 to my income this year 
cannot be laid out by calculation so as to increase each sort of 
expenditure to an extent which will secure marginal equivalence 
of utility. That is to say, I cannot tell what will be the best em- 
ployment of my larger income, until I have tried. The larger 
income will produce nowhere a strictly proportionate increase 
of expenditure on a number of several objects. It would shift 
my economic plan of life, making a new kind of life, and involving 
all sorts of changes in the items, which follow as consequences 
from the changed organic plan. This new plan I cannot accu- 
rately calculate or forecast. It will work itself out as I proceed. 
Its execution involves no doubt elements of forethought and even 
calculation, but the central and essential change will proceed 
from some novelty of conception, some qualitative change of 
purpose. In a word, it is the creative power of man, the artist, 
that is ever at work, and the art faculties of inspiration, faith and 
adventure will lead him to experiment anew with his resources. 
As a man gains more intelligence, undergoes some new critical 
experience of his outer or his inner life, encounters some new 
personal influence, his entire mode of living will change, and in- 
numerable alterations in the outlay of his income will take place. 
Some articles of earlier expenditure will disappear, new articles 
will take their place, and the respective importance of many arti- 
cles remaining in the expenditure will be shifted. A change of 
residence from country to town, a 'conversion,' religious or 
dietetic, a transfer from an outdoor manual to an indoor sedentary 
employment, marriage, or any other critical event, must bring 
about some such large complex organic alteration. A comparison 
of the items of expenditure before and after will shed interesting 
light upon the results of the psycho-economic change of which 
they afford a quantitative register, but it cannot be regarded as 
an explanation of the change of heart or of outlook which is the 
determinant act from which these shifts of values flow. 



336 WORK AND WEALTH 

§ 8. The life of a society presents this same problem on a larger 
scale. On the plane of economic conduct which directly concerns 
us, every one of the innumerable and incessant alterations in 
methods of production and consumption ranks as an organic 
novelty, and, in so far as it is novel, necessarily baflfles quantita- 
tive analysis and scientific prediction. It would, of course, be 
incorrect, either in the case of an individual or of a society, to 
represent any change as entirely novel. Organic growth itself 
is largely a quantitative conception: the changes are proportion- 
ate in size to former changes, and are in definite quantitative 
relations to one another. The doctrine of continuity thus enables 
us to go far in calculating the character of future changes. So 
far the scientific interpretation of uniformity of nature carries 
us. But quantitative growth, or any other set of quantitative 
changes, however calculable, always carries some qualitative 
and essentially incalculable elements of change. These are what 
we signify by novelty. It is their occurrence in evolution that 
baffles the clean logic of the geologist, still more of the biologist, 
and far more of the psychologist. Whether they show them- 
selves as 'faults' or 'sports' or 'mutations,' they represent the 
disabihty of past experience to furnish 'laws' for their calculation, 
and the practical importance which attaches to these incalculable 
or qualitative changes is very considerable. Though they may 
be comparatively infrequent and may appear on first inspection 
almost negligible breaks in the otherwise calculable continuity of 
the evolutionary process, their determinant importance is receiv- 
ing ever greater recognition. In human conduct, individual or so- 
cial, these mutations seem to play a larger part, chiefly by reason 
of the operation of the so-called ' freedom ' of the human will. For 
whatever philosophic view be held regarding the determination 
of the acts of the will, its operation scatters mutations thickly 
over the realm of human conduct. Hence it remains true that 
science can do so much less in explaining and predicting human 
history than in any other department of nature. No doubt here, 
as elsewhere, science hopes to apply quantitative analysis of such 
increasing accuracy as to enable it to determine and predict a 
larger number of such mutations. Since there doubtless exist 
quantitative conditions for every qualitative change, it may 



SOCIAL SCIENCE AND SOCIAL ART 337 

seem theoretically possible for science some day to catch up with 
'the art of creation.' This supposition, however, assumes that 
the number of permutations and combinations in 'nature' is 
limited, and that, therefore, in some extensive run history does 
repeat itself. The final victory of science thus seems to depend 
upon the adoption of a cyclical view of the history of the universe. 
But, for all present practical purposes of social processes, science 
is so far removed from this perfection that the economist and the 
sociologist are continually compelled to allow for unpredictable 
changes of such frequency and of such determinant importance 
that their claim to direct ' the general will ' and to mould the con- 
scious policy of a society must be very modestly expressed. 

Such laws of causation as they derive from past observation 
and experiment must usually be conceived as laws of tendencies, 
seldom endowed with any rigorous authority of close determina- 
tion, and still more seldom with accuracy of quantitative predic- 
tion. 

§ 9. It is sometimes supposed that this hampering effect of the 
uniqueness, irregularity, novelty and freedom of the individual 
and social organisms can be got rid of by a process of multiplica- 
tion in which particular eccentricities will cancel. To economists,, 
in particular, there is a strong temptation to fall back upon the 
average man, in the belief that scientific determinism justifies 
itself through averages. Now the radical defect of measurement 
by averages, as a mode of social valuation, has already been dis- 
closed. The ascertained fact that the average money income, or 
even the average real income, of the British people may have 
risen 10% within the last decade, disables itself, hy the very process 
of averaging, from informing us as to the effect of this increase of 
national wealth upon national welfare. For this effect depends 
upon the distribution of the increase, and the process of averag- 
ing consists in ignoring this vital fact of distribution. 

This defect of averages for purposes of interpretation, of course, 
involves a consequent defect for purposes of guidance in economic 
conduct. The calculation that a given course of national conduct, 
e. g., the expenditure of so many millions upon improved trans- 
port, will raise the national or average income by so much, loses 
all the worth of its superficial exactitude unless we know how 



338 WORK AND WEALTH 

much of the increase is going to the landlord in rising rent, how 
much to the labourer in rising wages. 

This, of course, involves no repudiation of the true utility of 
averages, but only of the spurious accuracy which their forms 
suggest. The exact statement that the average income of an 
English family has risen io% in the last decade does imply a 
reasonable probability that an increase of total national welfare 
has taken place.^ But it gives no information as to the amount of 
that increase, and is consistent with the fact that there may have 
been a decrease, owing to a worsening of the distribution of the 
growing income, or of the labour and other costs involved in its 
production, 

§ lo. So far upon the supposition that welfare is a quantity. 
It will occur to statisticians that the information to be got from 
averages of income may be justified by nicer discrimination. If, 
in addition to learning that the average income of all families has 
risen io%, we discovered the different percentages which had 
been added to rent, interest, profits and wages, or, better still, the 
ratio of increase for the different income levels, we should surely 
then, by this extended use of averages, get nearer towards a quan- 
titative estimate of the increase of welfare that had been achieved ! 

This must certainly be admitted. By the nicer and more com- 
plex application of these measures, we should approach a more 
accurate account of welfare, so far as it is ultimately expressible 
in terms of quantity. If we discovered that a proposed course of 
national policy would not only increase the average income by 
io% but would increase the lower incomes of the population in a 
higher ratio, we should seem to have got a scientific warrant for 
the policy. But even this degree of scientific authority would 
be purchased to some extent by an artificial simplification of the 
actual problem of social-economy. To the statesman no prob- 
lem of actual finance is capable of being set in such distinctively 
quantitative terms. Not merely cannot an earthly Chancellor 
of the Exchequer know how much can be added to the incomes 

^ Professor Pigou in his Wealth and Welfare discusses with skill and precision the 
measurable influences of an increase of the general dividend upon general welfare, 
but omits to take into consideration the 'cost' factors which enter into 'welfare,' 
however that term be defined. 



SOCIAL SCIENCE AND SOCIAL ART 339 

of the several classes by the expenditure of so many millions upon 
transport, or upon any other single service, but, if he could, he 
would not be much nearer to the standard he requires. There 
are many different ways of raising the revenue in question and an 
infinite number of combinations of these ways. The same holds 
of expenditure. To take the simplest case; the ten millions 
that he raises may be applied to transport, or to education, or to 
defence, all the sum or any proportion, to each. Each expendi- 
ture claims to be beneficial, an outlay for public welfare. But 
the benefit in the several outlays is not equally presentable in 
terms of money income, and, so far as definitely economic gains 
accrue, they are not equally immediate or equally assured. It is 
evident that no amount of possession of statistical knowledge 
can possibly reduce the problem entirely, or even mainly, to one 
of quantitative calculation. It is equally true that when the 
problem is solved, its solution will appear in quantitative shape, 
i. e. so much money for transport, so much for education, so much 
for defence. It will seem to have been worked out by reducing 
the three forms of desired benefits to common terms, and then 
dividing the ten millions among them so as to secure an equiva- 
lence of gains at the margins. Economists will point out trium- 
phantly the alleged fact that the last £100 spent on education 
produces a national return of welfare exactly equal to that ob- 
tained by the last £100 spent on gunboats, though his assertion 
remains inherently insusceptible of proof. In truth, the Chan- 
cellor's mind does not work in this way. So far as his statecraft 
is disinterested, or even allowing for every form of bias, his mind 
forms an ideal of social progress, of a happier or better state of 
things, and allots the outlay of his ten millions in an endeavour 
to assist in realising this ideal. Now the ideal itself is not chiefly 
a product of quantitative calculus, but of his more or less in- 
formed imagination, and his more or less wholesome sympathies. 
His views as to the means of reahsing this ideal can never be 
purely scientific, though science may here be of considerable 
assistance. 

If, treating expenditure more widely as an act of public policy, 
we consider it as an operation of the general will of the commu- 
nity, a true act of political economy, the problem remains essen- 



340 WORK AND WEALTH 

tially the same. When looked at through scientific spectacles, 
it is a purely quantitative and mechanically ordered act, because 
the scientific method by its very modus operandi ignores the 
qualitative factors. So the nation is supposed to balance this 
gain against another, and to lay out its revenue so as to get the 
largest aggregate of some common homogeneous stuff called 'wel- 
fare ', in such a way that the last £ioo spent on education is equiv- 
alent in its yield of this 'welfare' to the last £ioo spent on the 
latest super-dreadnaught, or the last lot of old-age pensions. 
In truth, the common will no more functions in this fashion 
than the personal will of the Chancellor. In each case State- 
craft is an Art, and the financial policy is an artistic or creative 
work in which quantities are used but do not direct or dominate. 

By this line of argument it may appear as if we had repudiated 
the entire utility of a scientific calculus. This, however, is not 
the case. For though all the determinant acts of policy or wel- 
fare, performed by an individual or a society, involve organic 
unity of design, and the quaHtative considerations appertaining 
thereto, important and indeed necessary assistance is rendered 
by the quantitative analysis of past acts expressed in the form of 
scientific generalisations. A clearer understanding of the nature 
and extent of this cooperation between science and art in the 
conduct of life enforces this truth. 

§11. Science takes its stand upon a twofold application of the 
assumption of the uniformity of Nature, first, that all differences 
of composition can be treated as differences of quantity or de- 
gree, secondly, that history repeats itself. Now, just so far as 
these assumptions fit the facts. Science is valid for interpretation 
and for guidance. This explains why astronomy, physics and 
chemistry are more 'exact' sciences than biology or psychology, 
and why they are able to give more reliable and authoritative 
rules for the arts of navigation, engineering and drug-making, 
than the latter can for medicine, for breeding or for education. 
Edward Carpenter has remarked that astronomy is the most 
exact of the applied sciences, because we know least about it, 
i. e. because we treat its subject-matter almost entirely from the 
single quantitative standpoint of space relations. In all arts 
dealing entirely or mainly with inorganic matter science occupies 



SOCIAL SCIENCE AND SOCIAL ART 341 

a seat of high authority, because of the high relative uniformity 
of this matter and the comparative regularity of its behaviour. 
In physics or in inorganic chemistry the individual differences 
or eccentricities of the material are so trivial that they can usually 
be disregarded, and history repeats itself with so much regularity 
that quantitative laws apply. 

The passage from the inorganic to the organic involves, as we 
recognise, a double assertion of the qualitative: first, in re- 
spect of the unity and uniqueness of the organic structure, and 
secondly, by reason of the novelty that attends each act of or- 
ganic change, vital movement, assimilation, growth, reproduc- 
tion or decay. The uniqueness of the individual organism and the 
novelty of each of its changes are an assertion of the qualitative 
nature of the subject-matter. So far as this quahtative nature 
prevails and counts for ' conduct, ' scientific analysis is impotent 
for interpretation and advice. When organic matter attains the 
character of consciousness and the still higher character of self- 
consciousness, the qualitative considerations reach a maximum, 
and the interpretation and directive power of science a minimum. 
But that minimum must not be disparaged. It is not incon- 
siderable. The assistance which scientific laws can render to the 
finest arts of human conduct is very important and is capable of 
constant augmentation. For so far as human nature is uniform 
and stable among the units which constitute the life whose con- 
duct and welfare are in question, the interpretation and direction 
of science has vahdity. To this extent a utilitarian calculus, 
based upon analysis of past experience, can aid the statesman or 
the philanthropist in working out his design. In the region of 
industry the extent of this scientific service will be even greater 
than in the arts of conduct whose material is more exclusively 
organic or psychical. For industry, considered as an art of human 
welfare, will consist largely in the orderly and progressive adapta- 
tion of inorganic matter, or of organic matter whose organic dif- 
ferences can be ignored, to the satisfaction of those needs of man- 
kind in which men are similar. That is to say, in industry there 
exists and will remain a great deal of work and of consumption 
which is essentially of a uniform or routine character, requiring 
to be done by measured rules, and depending for its utility upon 



342 WORK AND WEALTH 

the exclusion of all individuality or quality. This applies, not 
only to those industrial processes which we term strictly mechani- 
cal, but to a great many others where quality is a matter of com- 
parative indifference. In the progressive economy of human 
welfare mechanical or routine production will even frequently 
displace an art in which quahty was once displayed. So home- 
baking, into which no small degree of cuUnary skill could go, has 
given way to machine-baking in which the element of personal 
skill plays a diminished part, and on which the individual taste 
of the consumer exerts little directive influence. This may be 
taken as a typical example of the displacement of quahtative 
art by quantitative mechanism. It is, of course, of very wide ex- 
tension, being, in fact, commensurate with the application of 
scientific methods in the world of industry. Indeed, the sciences 
of chemistry and physics, botany and biology, are everywhere 
invading the ' arts ' of industry and imposing ' rules ' upon indus- 
trial processes. Even more significant is the application of the 
still infantile science of psychology to the arts of business organ- 
isation and enterprise and of marketing. How can psychology 
assist in the delicate art of recommending goods to possible pur- 
chasers? Only on the supposition that there is sufficient uni- 
formity and stability in human nature to enable the measured 
rules of past experiment upon other men to hold of this man. 
Only so far as men are really the same sort of stuff, or so far as 
any differences are measurable and calculable. Novelty alone 
can baffle applied science. 

If it were true, as some appear to think, that machinery and 
routine method were destined continually to absorb a larger and 
larger proportion of human work, and to direct a larger and 
larger share of human life, economic science with its quanti- 
tative calculus would acquire a continual increase of exactitude, 
and a growing capacity for direction in the art of social conduct. 
But if, as seems more reasonable, progressive industry must serve 
to feed a richer liberty and novelty of individual and social life, 
the domain of quantitative calculus, though absolutely enlarging, 
may be relatively shrinking. 

We now seem able to get a more accurate understanding of 
what a scientific calculus can do for the assistance of the art of 



SOCIAL SCIENCE AND SOCIAL ART 343 

social welfare. It can do for that art what it can do for every 
other art, viz. furnish rules for the regular. So far as the stuff 
which constitutes or composes human welfare is uniform, i. e. 
so far as men are aUke in their needs, and the material for the 
satisfaction of these needs is similar, it can supply rules of social 
economy which will have a high degree of vaHdity. Though no 
two human organisms are identical in structure, all human or- 
ganisms within a wide range of environment are so similar in the 
kinds of food, air and other material goods which they require, 
that it is sound 'social policy' to ignore their differences and to 
treat them as identical in the qualities of their demands and 
dissimilar only in the quantities. The practical economy of 
'markets' stands upon this basis, and the quantitative treat- 
ment finds its true justification in the utiHty of markets. There 
can be no market for the single or ' singular ' consumer. A mar- 
ket, i. e. a practical instrument for measurement of economic 
wants, implies a standardisation of the desires of buyers and 
sellers. Just so far as the members of an economic community 
are thus standardised in their preferences, are economic laws 
applicable. Thus, for the scientific interpretation of such a com- 
munity, much depends upon the relative strength and impor- 
tance of the standardising and the individualising forces. In a 
society where the so-called ' arts ' of industry and of consumption 
have alike passed by imitation or tradition into firm conventions 
from which the least transgression is branded as an impiety or a 
wickedness, economic laws, based upon a sufficient study of the 
past and present, will enable one to predict the future with con- 
siderable accuracy. Primitive or backward communities are 
usually in this conservative condition. Moreover, as they ad- 
vance and become economically progressive, it is observable that 
the most conservative and most calculable wants and activities 
are those relating to the satisfaction of the primary material 
needs. Hence it is evident that scientific predictions, based 
either upon general considerations of human nature or upon past 
measurements, will come nearest to fulfilment, according as they 
relate to the production and consumption of those articles most 
deeply embedded in the standard of living. Conveniences and 
comforts are more changeable than necessaries, and luxuries most 



344 WORK AND WEALTH 

changeable of all. Now the marginal or least useful portion of 
those supplies, which in the earlier or most useful increments 
satisfy some prime need, are often luxuries. The marginal portion 
of the wheat supply goes for cakes, or is thrown into the dust-bin 
as waste bread: the marginal oil goes into motor rides. Taking 
expenditure in general, we find the last ten per cent of every in- 
come most incalculable in its outlay, because it represents those 
purchases in which custom is weakest and individual taste or 
opportunity the strongest. In a word, it is precisely in those eco- 
nomic actions which express marginal preferences, the pivot of 
the mechanical calculus, that we find the maximum of insta- 
bility and incalculability. For each of these nice marginal pre- 
ferences proceeds directly from the changing nature of the organic 
personality. Whereas fifty per cent of a man's expenditure may 
express the common satisfaction of the fixed physical needs 
which custom has embedded in a standard of subsistence, thirty 
per cent the lighter but fairly stable comforts belonging to his 
class, the last twenty per cent is the part in which he expresses 
his individual character and his cravings for personal distinction 
and variety of enjoyment. 

The formal invalidity of the 'marginalist' method has already 
been disclosed. The considerations just adduced indicate its 
practical futility as a means of guidance for economic art. Nei- 
ther as a deductive nor as an inductive science can Economics 
furnish accurate rules for calculating or directing future economic 
events. It can only prophesy within such limits as are set by the 
assumptions of the stability of human nature and of its environ- 
ment. Its rules or 'laws' will best interpret and predict those 
economic actions which are most remote from the margin, i. e. 
those which are most conservative or regular. Marginal prefer- 
ences will therefore be precisely those which it is precluded from 
interpreting or predicting by the necessary defect of the intellect- 
ual instrument. 

§ 12. Thus the final futility of the mechanical method of mar- 
ginalism lies in its insistence upon applying a quantitative method 
of interpretation to the most qualitative portion of the subject- 
matter, that portion where the organic conditions of personality 
and novelty are of paramount significance. 



SOCIAL SCIENCE AND SOCIAL ART 345 

Indeed, it is for this reason that economic science, though able 
to supply relevant and important evidence, can never solve con- 
clusively any social-economic problem, even in that field of action 
where her authority is most strongly asserted. A given rise or 
fall of price can never produce the same effect upon demand 
twice running. Why? Because the desires and beliefs of the 
more unsettled section of buyers, the 'marginal' buyers, will have 
changed. Nor can this alteration in effect upon demand be cal- 
culated. Why not? Because the changes in desires and be- 
liefs are organic qualitative changes. Observations of past price- 
movements and laws based upon them are not thereby rendered 
useless. For these organic changes will often be negligible so 
far as the bulk of the market is concerned. But they negate the 
possibilities of exact prediction, and often of approximate pre- 
dictions on the margin. 

This is why the 'great' business man often prefers to act by 
intuition than by express calculation. He recognises that, so far 
as the more delicate judgments are concerned, his 'feeling' of 
'how things will go' is more trustworthy than any estimate. He 
does not act blindly. He feeds and fortifies his mind with facts 
and figures, until he is steeped in familiarity with the subject- 
matter. But he does not deliberately balance against one another 
these measured forces and commit himself to the resultant. For 
he is aware that the problem is not one of mere mechanics, a 
counting-house proposition, but one involving for its solution 
sympathy and imagination. 

But the crucial instance of the organic and spiritual nature of 
a distinctly economic problem is in the case of credit. The math- 
ematical mechanical treatment claims to find its supreme justi- 
fication in the part played by money, the most abstract of eco- 
nomic phenomena. Credit, in its objective sense, is the economic 
plenipotentiary, the absolute representative of economic power. 
For he who has credit has the command of land, capital, labour, 
ability of every sort, at any time and in any place. Credit is pro- 
ductive power and purchasing power, for he who possesses it can 
convert it into any sort of supply or demand he chooses. It is 
absolutely quantitative, fluid, divisible and measurable. Such 
is credit, treated objectively by economic science. But credit 



346 WORK AND WEALTH 

is also the heart and brains of the industrial system. Subjec- 
tively regarded, it is an essentially spiritual thing, a delicate, 
sensitive creature of human beliefs and desires. Its volume and 
its power for practical work are affected by this spiritual nature. 
For its springs are fear, hope, prestige, superstition, sympathy 
and understanding. Its true basis is neither gold, nor goods, 
but credibility. And that quality of credibility is fluctuating 
all the time for every individual, every business, every state. 
New unpredictable events are constantly affecting it. No one 
can therefore say with any assurance of correctness "a Bank 
should keep 20% of its resources in reserve or at call," or put 
any such rigid limit for the operations of any Bank. If we do 
set any such quantitative limit, we should realise that it is only a 
rough practical rule, which, if interpreted with automatic rigour, 
leads to waste and error in the actual working of finance. For by 
no plotting of curves can you reckon the future flow of human 
credibility, or the application of a given amount of concrete 
credit to the ever-changing gains and risks of human industry. 
Take the critical case of a collapse of credit and the run upon a 
Bank. To predict with even approximate accuracy the course of 
such a run, or to check it by calculations, based upon past expe- 
rience of similar crises applied to the records of present assets and 
liabilities, would be impossible. Why? Chiefly because of the 
psycho -physical factors, the play of organic forces. You can 
calculate with close exactitude the strain imposed upon a bridge 
of a given size, material and structure by a given weight, dis- 
tribution and pace of trafiic. You cannot calculate with equal 
exactitude the strain which a given quantity of liabilities, how- 
ever carefully analysed and graded, will impose upon a Bank re- 
serve of a given size. 

The incalculable element consists of organic novelty, the 
changes due to having to deal with matter not dead and homo- 
geneous but living and organised. The citation of such instances 
is not designed to prove that monetary and other statistics are 
practically useless for the prediction and solution of social- 
economic problems. On the contrary, they are exceedingly use- 
ful. But the formal exactitude which they carry in their method 
can never be conveyed into the work they are required to assist 



SOCIAL SCIENCE AND SOCIAL ART 347 

in doing. The most abundant supply of the most accurate sta- 
tistics, utilised by the most approved methods of economic 
science, can only afford results of a rude approximate validity, 
expressed in tendencies. The practical man in business, in poli- 
tics, in every mode of social conduct, will supplement and correct 
the application of the scientific rule by the play of private judg- 
ment and intuition. 

* * * 

§ 13. If this is true as regards all predictions of future economic 
happenings, it is still more true of the conscious purposive guid- 
ance of these happenings by the application of a human standard 
of values. The practical statesman or social reformer, confronted 
with a concrete social problem, e. g. the demand for a state 
enforcement of a national minimum of wages, local option for 
the closure of pubhc houses, or a referendum for constitutional 
changes, will find himself 'paying attention' and 'giving weight' 
to a number of diverse and opposing considerations. How will the 
selection and the 'weighing' of these considerations be brought 
about? Not directly and consciously by the appHcation of what 
may be termed his social ideal, the image in his soul of the society 
which seems to him absolutely the most desirable. The relation 
of that ultimate ideal to the particular scheme under considera- 
tion, e. g. a national minimum wage, may be too distant and too 
dubious to afford valuation and direction. The operative ideal 
will be derivative, one of a related set of possible-desirables, 
limited and practicable ideals which form the most potent in- 
struments of his statecraft. Such an operative ideal for an 
Englishman at the present time might be the vision of the State, 
as the collective will, securing by law a clearly conceived standard 
of sound efficient life for the ordinary working-class family. This 
present practical ideal, derived from a wider conception of the 
duty of the State in relation to the individual members of a civi- 
lised society, would itself be a far wider scheme than the partic- 
ular proposal, that of national minimum wage, which it was 
invoked to assess. The statesman, enlightened by this deriva- 
tive ideal, would apply it as a test and standard to the particular 
proposal. He would consider it, not merely 'upon its own merits' 
but as incorporated in the more complex organic plan of his 



348 WORK AND WEALTH 

national minimum. This organic plan and purpose would de- 
termine the 'value' he gave to the various 'pros' and 'cons,' as 
for instance to the consideration how far legal intervention might 
weaken the private organisation of workmen in their trade-unions, 
so damaging other benefits of trade-unionism, or the considera- 
tion how far it was better to wait and secure a more demo- 
cratically administered State before entrusting it with the delicate 
function of adjusting pecuniary arrangements between workmen 
and employers. This plan or purpose of a national minimum, 
as a possible desirable, will of course not remain quite stable in 
his mind, will not be a rigid standard. It will change somewhat 
in pattern, and in definiteness of outline, as some fresh outer or 
inner experience makes any part of it, or the whole, seem more 
or less desirable, or more or less possible, than formerly. 

§ 14. But the important point to note is that it is this larger 
organic plan or vision, the character and changes of which are 
essentially qualitative, that furnishes the standard and stamps 
with their respective 'values' the various considerations which 
are said to 'determine' the practical value of the proposal and 
its acceptance or rejection. No social-economic proposal, how- 
ever distinctively quantitative it appears, can be humanly val- 
ued in any other way. It is for this reason that a mere econo- 
mist is always disabled from giving practical advice in any course 
of conduct. Take two examples. Political economy can legi- 
timately apply laws of value so as to show that, under competi- 
tive conditions, a nation must produce a larger quantity of mar- 
ketable goods under a policy of free imports than under any sort 
of Tariff. But that proof in itself can never be sufficient ground 
for rejecting either a Tariff for revenue, or even a Tariff for pro- 
tection. For the Statesman can never take the maximum of 
marketable values as liis final and sufficient test. If it could be 
shown that national security were involved in a protective system 
which kept all necessary industries within the national limits, he 
might plead ' defence is more than opulence. ' Or, if it could be 
shown that a protective tariff could be operated so as to distrib- 
ute a slightly reduced aggregate of wealth in a manner more 
conducive to the popular welfare and that this consideration was 
not offset by fear of corruption or of impaired industrial efficiency, 



SOCIAL SCIENCE AND SOCIAL ART 349 

or other disadvantages, the Statesman might rightly adopt a 
Tariff in the teeth of ' economic laws. ' ^ 

Or, take another example, the proposal for an eight hours day, 
secured by law. A purely economic enquiry might, by consider- 
ing the elasticity of labour in various employments, arrive at the 
conclusion that a general shortening of the work-day would involve 
a present reduction of the product by so much percentage in dif- 
ferent trades, and that it might involve a reduction of profits and 
of wages and a probable loss of so much export trade in various 
industries. It might even present some tentative estimates as to 
the effects of the pressure of this new cost of production in stimu- 
lating improved economies in mines, factories or railways. Such 
information would be useful and relevant, but not authoritative 
upon the judgment of the Statesman. For the social value of a 
shorter work-day would depend mainly upon the organic reactions 
of increased leisure upon the whole standard of Ufe of the working 
family, how it affected his expenditure of his wages, its effect 
upon his health, education and recreations, the cultivation of 
family affection, the better performance of neighbourly and civic 
duties, and all that is involved in more hberty and a larger out- 
look upon life. It is evident, in the first place, that these essential 
considerations lie outside the calculations of the economist, and, 
secondly, that the actual value set on each of them will depend 
upon and be derived from the whole faith and social vision of 
the statesman in question. 

This social or human valuation of a so-called economic process 
or good, involves then two departures from a quantitative calcu- 
lus; first, the reduction of the particular economic factors them- 
selves from financial or other quantitative terms to vital or sub- 
jective terms; secondly, the restoration of this artificially severed 
economic process to the larger integrated process of human life 
from which it was abstracted by the scientific specialism of the 
economist. The economist can find the facts, but he cannot find 
their human importance or value, because assigning human value 

^ Protectionists can seldom, if ever, plead successfully either of these cases. By 
reducing the community of economic interests between nations Protection normally 
increases the chances of war, while lessening the national resources which are the 
sinews of war. So, likewise, its normal tendency is to worsen the distribution of 
wealth within the nation. 



350 WORK AND WEALTH 

means referring to an extra-economic standard. It means more 
than this. It means a reference to an extra-scientific standard, 
one whose distinctive character consists in its being the expression 
and operation of the organic complex of forces composing the 
social personality as mirrored in the conscious or unconscious 
efforts of the individuals and of the Society who make the valua- 
tions and frame their conduct upon them. 

§ 15. In conclusion it is necessary to enforce an exceedingly 
important distinction in the conception of social or human 
valuation. The term means two things, the attribution of human 
or social value by an individual and by a society. In most of our 
illustrations we have taken the standpoint of the Statesman or 
the reformer, or of some other person, and regarded social values 
from his eyes. We have taken his ideal as a social ideal. So it 
is in the sense of being his ideal of a society. But it is essential 
also to consider society as seeking to realise its own ideal. ' The 
whole succession of men during many ages/ said Pascal, 'should 
be considered as one Man, ever living and constantly learning.' 
This is the true organic view of humanity, regarded either as a 
single whole or in its several races, nations or communities. The 
apophthegm is not primarily of political or of ethical significance, 
but a statement of natural liistory. It is corroborated in a 
striking manner by modern biological teaching, with its continuity 
of the germ-plasm, its embryonic recapitulation and its specific 
evolution. But not until natural history is rescued from the 
excessive domination of a purely physical biology, and is read in 
the language of collective psycho-physics, do we grasp the full 
bearing of the organic conception in its application to a society. 
For this conception of mankind as working out the human career 
by the operation of its original supply of faculties and feelings, 
in which instinctive physical motives take an increasing admix- 
ture of conscious rational guidance, is the key to an understand- 
ing of the ascent of man. There is no clear evidence of the con- 
tinuous ascent of man regarded as individual, at any rate within 
'historic' times. There is evidence of the ascent of human so- 
ciety towards a larger and closer complexity of human relations 
and a clearer intellectual and moral consciousness. This means 
that mankind, as a whole, and its several societies, is becoming 



SOCIAL SCIENCE AND SOCIAL ART 351 

more capable of a human valuation and of a collective conduct of 
affairs guided by this conscious process. In politics, regarded 
in its wider meaning, this truth has taken shape in the modern 
conception of the general will, which in popularly-governed 
States functions through public opinion and representative in- 
stitutions. Following our examination of the limits of science or 
* rationalism ' in the processes of valuation and of conduct on the 
part of individuals, we shall expect to find some corresponding 
limits in collective man. In other words, the general will of a 
people cannot be regarded, either in its estimates or its deter- 
minations, as a merely or a mainly calculative process, working 
out the respective values of existing circumstances, or proposed 
changes, in terms of clearly-defined utiHty. It does not even 
with fuller information, wider education and firmer self-control, 
tend towards this scientific politics. Collective self-government, 
like individual self-government, will always remain essentially 
an art, its direction and determinant motives being creative, 
qualitative, and rooted in the primal instincts of man. 

§ 16. It is upon this conception of the collective instincts of 
society regarded as an organism that a rational faith in demo- 
cracy is based. The animal organism, itself a society of cells, is 
endowed with energy of body and mind, operating through an 
equipment of instinctive channels towards its own survival and 
development and the survival and development of its species. 
Where there is danger lest too much of this energy should be con- 
sumed upon individual ends, too little on specific ends, the social 
or self-sacrificing instincts are strengthened in the individual, 
and are reinforced by the herd or specific feelings of other indi- 
viduals, as where plunderers of the common stock or shirkers in 
the common tasks are destroyed by the hive or herd. The in- 
stinct for the survival and development of the hive, herd or 
species, cannot be satisfactorily explained as belonging only to the 
psycho-physical equipment of the individual members. On 
this basis, viz. that of attributing a social nature only to the 
individual members of a society, the acts of devotion and 
self-sacrifice, and still more the acts of preparatory skill, the 
elaborate performance of deeds that are means to the sur- 
vival and well-being of a future generation, become mere hap- 



352 WORK AND WEALTH 

hazard miracles. Take the familiar example of the Hunting 
Wasp. 

'The larvae of the various Hunting Wasps demand a motionless prey who 
will not, by defensive movements, endanger the delicate egg and, afterwards, 
the tiny grub fixed to a part of the prey. In addition, it is necessary that this 
inert prey shall be nevertheless alive; for the grub would not accept a corpse 
as food. Its victuals must be fresh meat and not preserved provisions. 
These two antagonistic conditions of immobiUty and life the Hymenoptera 
realises by means of paralysis, which destroys movement and leaves the 
organic principle of life intact. With a skill which our most famous vivisec- 
tors would envy, the insect drives its poison sting into the nerve centres, the 
seat of muscular stimulation. The operator either confines himself to a single 
stroke of the lancet, or else gives two, or three or more, according to the 
structure of the particular nervous system and the number and grouping of 
the nerve centres. The exact anatomy of the victim guides the needle.' ^ 

Such conduct is not made intelligible by any other hypothesis 
than that of a collective life of the species, the individual Hves 
being, in fact, parts of a common specific life towards which they 
contribute in a manner similar to that in which the cells, with 
their particular lives, contribute to the life of their organism. 
Only by this application or extension of the 'organic metaphor' 
to the relations between members of an existing generation, and 
between successive generations, can we construct an intelligible 
sequence of causation between these preparatory acts of indi- 
vidual insects of one generation and the results accruing to other 
individuals of another generation. 

This 'general will' (may we not call it so?), urging the indi- 
viduals to the fulfilment of a purpose which is but slightly theirs, 
and is not mainly that of the existing generation, but which em- 
bodies the general purpose of the species or some wider purpose of 
a still larger organic whole, can only be realised for thought and 
feeling as a single current of will implying and conferring unity of 
life upon the species or the larger unity. 

In * lower ' animal spheres we recognise this fact. But there is 
a tendency to hold that man, subject to some such specific urge or 
instincts in his primitive stages, has become more and more indi- 
vidualised and has done so largely by becoming more rational. 
The gradual displacement of instinct by reason, it is contended, 
has made man more self-sufl5cient, his Hfe more of the nature of an 

^ Henri Fabre, The Eng. Review, Dec, 191 2, The Modern Tlieory of Instincts. 



SOCIAL SCIENCE AND SOCIAL ART 353 

end, less of a means towards the life of his tribe or nation, or even 
towards that of humanity as a whole. Is this so? There are two 
issues that open here. In the process of civilisation a man cer- 
tainly becomes more individual. He differs in character more 
from his fellows than in earlier times; he is able to devote, and 
does devote, a larger share of his energies of body and mind to 
activities which are primarily self-regarding. Moreover, he 
tends to rely less exclusively or predominantly upon what would 
be called his instincts and more upon his reason. 

§ 17. The 'general will', which through forms of tribal custom 
and of gregarious instinct pulsed so vigorously and so insistently 
in tribal life, seems to have weakened with every expansion of 
social area and v/ith the advancing complexity of social relations. 
The economy of human energy allows individuals to apply a 
larger share of the life-force that flows through them to what 
appear to them their private purposes, a smaller to the protec- 
tion and development of the society or species. If we were to 
assign any final validity to the opposition of individual and so- 
ciety, this change might be regarded as a shrinkage of the domin- 
ion of the 'general will,' the specific as contrasted with the indi- 
vidual purpose. But though the narrow intense tribal will may 
thus appear to have yielded to a broader, feebler and less im- 
perative form of national or social will, it by no means follows 
that this latter works less effectively for the common good. As 
man becomes more intelligent and more reflective, and has for- 
tified himself with larger and more reliable records and better 
methods of controlling his environment, the instinctive operations 
of the will of groups of tribal animals give place to more conscious, 
more rational, purposes. 

The change must not indeed be overstressed. The validity of 
the general will does not depend upon the degree of conscious 
rational purpose it has attained. It remains to-day in the most 
highly civilised communities what it was in primitive tribal life, 
an organic instinct. The rationahsation of this blind faculty of 
organic self-protection and advancement has not yet gone very 
far. Indeed, it is exceedingly important to recognise that an 
organic instinct of conservation and of progress underhes the 
v/isdom of the people. Those who consider politics a rightful 



354 WORK AND WEALTH 

monopoly of the educated classes doubly err; first, in ignoring 
the instinctive wisdom of the people, secondly in claiming for 
education a higher value for political direction than it possesses. 
The political wisdom of the Roman or the Germanic peoples par- 
takes far more of a natural sagacity than of a reasoned process. 
If this applies to the great statesman, it is still more applicable to 
the body of the people whose consent or active cooperation con- 
tributes to. the evolution of a stable and a progressive state. 
It is impossible to understand or to explain any long and complex 
movement in national history by piecing together the conscious 
rational designs of the individuals or groups of men who executed 
the several moves of which the movement seemed to consist. 
Such a structure as the British Constitution, such an episode as 
the French Revolution, cannot be otherwise regarded, in its 
organic unity, than as a product of energies of common will and 
purpose, wider, deeper and obscurer in their working than the 
particular intelligible motives and aims which appeared on the 
stage of parliamentary debates, military campaigns or mob vio- 
lence. Every student of the 'spirit' of one of these great national 
dramas is driven to recognise some moulding or directing influ- 
ence, some urge of events, by which they seem to unfold them- 
selves in a larger and more complex pattern or consistency than 
is perceived by any of the agents. There is sometimes a tendency 
to give a mystical interpretation to this truth. So Victor Hugo 
writes of the French Revolution: 

'Eire un membre de la Convention, c'etait etre une vague de 1 'Ocean. 
Et ceci etait vrai des plus grands. La force d'impulsion venait d'en haut. 
II y avait dans la Convention une volonte qui etait celle de tons et n 'etait 
celle de personne. Cette volonte etait une idee, idee indomptable et de- 
mesuree qui soufflait dans I'ombre du haut du ciel. Nous appelons cela la 
Revolution. Quand cette idee passait elle abattait I'un et soulevait I'autre; 
elle emportait celui-ci en ecume et brisait celui-la aux ecueils. Cette idee 
savait ou elle allait, et poussait le gouffre devant elle. Imputer la revolution 
aux hommes, c'est imputer la maree aux flots.' ^ 

The explanation of our colonial empire as the result of a career 
of conquest and expansion conducted ' in a fit of absence of mind ' 
is an exact statement of the truth. For though a few great empire- 
builders, such as Warren Hastings, Molesworth, Elgin, Grey and 
^ Quatre-vingt-treize, Livre III, Chapter XI. 



SOCIAL SCIENCE AND SOCIAL ART 355 

Rhodes, may have played their parts with some measure of con- 
scious design, the individual channels of this current of adven- 
turous and constructive energy embodied in the general process 
had as little an idea of the imperial edifice as any working bee of 
the great symmetrical structure of the hive. 

§ 18. This sense of 'manifest destiny' is surely no illusion. 
It is the evolutionary method by which all organic process is 
achieved, whether in the growth of an oak tree from its acorn, of 
a motor car from the earHest hand-barrow, a musical symphony 
from a savage tom-tom, or a modern federal state from the prim- 
itive tribal order. In every case a number of what seem separately 
motived actions are seen to carry and express the continuity of 
some common tendency which brings them under the control of 
a single collective design. This wider purpose is seen operating 
upon the larger organic stage of conduct in ways closely analogous 
to the operations of the poet or the artist in any human fine art. 
It exhibits the urge of an inner flow of psycho-physical energy 
seeking ever finer modes of expression by moulding the materials 
at its disposal. As soon as we grasp this idea of the collective 
artistry of a species or any other organic group, we recognise 
how lacking in logical finality is the accepted antithesis of in- 
stinct and reason. The reason of the organism will appear as a 
blind instinctive drive to the cell whose conduct it directs. So 
the specific purpose will show itself as instinct in the individual 
organism, though it may be neither blind nor unconscious to the 
species taken as the organic unit. Nay, we may go further and 
suggest that advancing reason in the individual animal may con- 
sist in a growing sympathy and syn-noesis with the operations of 
the wider organism. Must not this be what happens when what 
we term reason endorses and reinforces the instinctive actions of 
specific preservation and well-being, substituting reflection for 
impulse, plans for customs, orderly and changing institutions 
for blind ordinances whose authority is gregarious imitation or 
superstitious prestige? Are we wrong when we trace an instinct 
of obedience to a chief transformed into a reasoned submission 
to the law? May not then the whole process of the rationalisation 
of man be regarded as a bringing of the individual man into vital 
communion of thought and feeling with the thoughts and feelings 



356 WORK AND WEALTH 

of the race, of humanity, perhaps of the larger organic being of the 
kosmos? For a man only becomes rational so far as he takes a 
disinterested view of himself, his fellow-men and of the world he 
Hves in, and the wider, closer, keener that view the more rational 
he becomes. Thus the evolution of the mind of man into a 
fuller rationality means the strengthening and clarifying of those 
relations of feeling and thought which bind him to his fellows 
and to his world and which are rooted in the ' bhnd ' instincts of 
gregarious, superstitious, curious man. 

§ 19. The upshot of these considerations is to break down the 
abruptness of the contrast between reason and instinct and to 
recognise in reason itself the subtlest play of the creative in- 
stinct. The 'disinterested' nature of the search for truth has 
been a subject of derision among some thinkers, who see no way 
by which man the individual can disengage himself from the 
selfish motives which seem to rule him and to dispose alike of his 
emotional and intellectual energies. In man regarded as indi- 
vidual it is very difficult to recognise any possibility of a dis- 
interested motive, because all such motives are ruled out ex 
hypothesi. But regard the individual man as subject to the dom- 
inant control of some wider life than his, that of race, society, 
humanity or kosmos, and the difi&culty disappears. He becomes 
capable of 'disinterested' curiosity, 'disinterested' love, 'self- 
sacrifices' of various kinds, because he is a centre of wider in- 
terests than those of his own particular self. The action of a 
Japanese who throws himself upon the Russian bayonets at the 
word of command, of a doctor who inoculates himself with a 
deadly poison for the sake of science, the steady lifelong toil of 
milhons of peasants growing the food supply for unknown mil- 
lions of town-dwellers, are no longer 'disinterested' when they 
are looked at from the standpoint of the interests of humanity 
as a whole. This collective will and intelligence can never be 
considered wholly 'blind' when regarded from the collective 
standpoint. Every directive instinct of an organism, at any rate 
in the animal world, must be accredited with some related emo- 
tion^, and this emotion, regarded as a fact in consciousness, must 
be accredited with some measure of intelligence. The creature 

^ Cf. McDougall, Social Psychology. 



SOCIAL SCIENCE AND SOCIAL ART 357 

subject to the drive of an emotion must have some idea of what 
he is about, though the full psycho-biological 'purpose' of his 
action may be hidden from him. This organic standpoint gives 
an intelhgible meaning to what we may call the ' natural wisdom 
of the people.' The herd, the tribe, the nation is endowed with 
instincts of self-protection and of growth. These instincts are 
accompanied by corresponding emotions which, according to the 
degree of intelligence they contain, impel it to a right or eco- 
nomical use of the physical and spiritual environment for sur- 
vival and 'progress.' The instinctive and emotional stream of 
this common life becomes more 'rational' as the factors of in- 
telligence accompanying the emotions become clearer, better 
coordinated and endowed with larger capacity of central direc- 
tion. In the evolution of animal organisms this growth of ra- 
tionality impUes, and is compassed by, a decline of the special 
instincts with a consequent weakening of the special emotions 
attached to them, and the substitution of a flexible general in- 
stinct operating through a centralised nervous system and co- 
ordinating the special organic emotions and activities to serve 
a more clearly conceived organic purpose of the individual or the 
race. Reason, regarded as a motive power and not as a mere 
intellectual organ, must be considered as this general instinct of 
survival and growth, having its roots in the apparently separate 
instincts of hunger, procreation, shelter, pugnacity, flight, gre- 
gariousness, protection of young, curiosity, constructiveness, ac- 
quisitiveness and the like, and utilising the emotions proper 
to these several instincts for the economy of some more general 
plan of life. Reasoning, as an 'intellectual process, ' will probably 
derive its emotional food and impetus principally from the emo- 
tions carried by the instincts of flight and pursuit, which involve 
quick Judgment in the use of means, and by the curiosity and 
constructiveness which impel the more reflective study and adap- 
tation of material environment. 

It is, however, no purpose of mine to enter into the particulars 
of this theory of the natural origins of reason. It is sufficient 
to recognise; first that prior to the dawn of 'reason' in organic 
evolution, the instincts carry and apply a wisdom of direction of 
their own; secondly that when reason takes over much of this 



358 WORK AND WEALTH 

directing power it operates by coordinating, not by creating, 
motive power. 

So when we substitute for the individual organism the herd, 
the tribe, the nation, ascending to larger collective wholes, sus- 
tained by a clearer consciousness of unity and a fuller use of 
central conscious purpose, we follow the same economy of gov- 
ernment. If, as is often urged, a nation, regarded as an organism, 
must be classed as a comparatively primitive type, on a level 
rather with the sponges or algae than with the higher animals, 
we shall expect to find that a very large measure of such ' wisdom ' 
as it possesses will be instinctive rather than 'rational.' The 
evolution of a general will, whether operative by public opinion 
or governmental institutions, will on such a hypothesis possess 
no great degree of centraHty or clear consciousness. Good gov- 
ernment in such a society could not be compassed by an oligarchy 
or even a representative assembly assuming a measure of de- 
tailed and far-sighted policy for which the collective life was not 
yet ripe. A large measure of what from the rational standpoint 
would rank as 'opportunism' would be the true policy at such 
a stage of social evolution, and the wise statesman would keep 
his ear to the ground so as to learn the instinctive movements of 
the popular mind which would yield the best freight of political 
wisdom at his disposal. Only as education and closer and more 
reliable communications elevated the organic structure of Society, 
imparting higher spirituality, more centrality and clearer con- 
sciousness to its life, should we expect any considerable rationali- 
sation of the general will. Meanwhile arise the temptation and 
danger of the formal instruments of government falling into the 
hands of a little highly self-conscious group or class, who may seek 
to impose upon the conduct of the nation its clearer plans and 
far-sighted purposes "under the name and pretext of the com- 
monwealth." The absolute or actual wisdom of their will they 
will be apt to represent as embodying the reahty of the general 
will. It is what they think 'the people' ought to will and there- 
fore what the people will come to will as soon as they are really 
capable of willing intelligently! 

It is, however, exceedingly important to try and recognise the 
instinctive wisdom of the people, in order that a misrepresenta- 



SOCIAL SCIENCE AND SOCIAL ART 359 

tive government may be prevented from ignoring it and substi- 
tuting the rationalism of some little conscious class. 

This does not mean that a Government must always govern 
and adapt its laws to the level of the current feelings, desires and 
aspirations of the average man, giving him no lead or stimulus 
to higher rationality. Such a course would be to ignore that 
capacity for progress and that susceptibiUty to proximate ideals 
which are themselves implanted in the instincts of mankind. 
But it does require that a Government shall keep itself in the 
closest sympathy with the concrete feelings and ideas of the peo- 
ple, maintaining such contacts as shall enable its acts of poHcy 
to rank as substantially correct interpretations of the general will, 
not as the designs of a supreme governing caste or group of in- 
terests, pumped down through some artfully contrived electoral 
machinery so as to receive the false formal impress of ' the gen- 
eral will.' 

These reflections upon the nature of popular government may 
appear to have carried us far afield. But they have been no 
irrelevant excursion. For upon our view of the nature and meas- 
ure of rationahty to be imputed to the processes of reform or prog- 
ress in national life must depend our view of the part which can 
be played by the social sciences which are invoked as the chief 
instruments of conscious collective conduct. 

Recognising that social progress in all its departments re- 
mains always a collective art, inspired and sustained by creative 
impulses which owe neither their origin or their vaHdity to sci- 
ence, we shall regard the social sciences as servants rather than 
directors of social progress. We shall be concerned to ask, 
What are the proper and particular services such sciences can 
render? How can they assist a people in utilising its human and 
natural resources for the attainment of the best conditions of 
human life, individual and social? 

This work is written as a partial and illustrative answer to 
these questions. Taking industry, that department of social 
conduct most susceptible of the quantitative measurement which 
is the instrument of science, we have endeavored to construct 
and apply an organon of human valuation to its activities and 
achievements. Recognising that industry, regarded from the 



36o WORK AND WEALTH 

individual or the social standpoint, was an organic activity, in- 
volving continual reactions upon the whole life of the individual 
and the society, we insisted that the standard of valuation must 
be constructed in terms of organic well-being. In other words, in- 
dustry, both from its productive and its consumptive side, must 
be valued in terms of individual and social health, that term 
being selected as the one which best expresses the conditions of 
conservation and of progress universally recognised as the essen- 
tials of a 'valuable' life. In the actual interpretation of this 
organic welfare, we took for our valuer 'enHghtened' common- 
sense. The roots of this common-sense we find laid in the 
silent, instinctive organic strivings of mankind. It is the 
business of science, or organised knowledge, to direct these 
strivings so as to enable them to attain their ends more economi- 
cally. It does this by interpreting experience and supplying 
the interpretation in the shape of 'laws' to enlighten common- 
sense and so enable it to choose its paths. For the economy of 
blind instincts is only accommodated to simple activities in a sta- 
ble environment, and is even then subject to enormous vital 
wastes. For complicated activities in a rapidly changing and 
complex environment, a general instinct of adaptability of means 
to ends, involving conscious reflection, is required. Reason is this 
general instinct and science is its instrument. Society, as its proc- 
esses of evolution become more conscious, will be able to use more 
profitably the services of science. Those services consist not in 
authoritative legislation for social conduct, for laws based upon 
experience of the past can have no full authority to bind the fu- 
ture. Faith and risk-taking, involving large elements of the in- 
calculable, are inherent in organic processes, and are the very sap 
of spiritual interest in life. They can never be brought under the 
dominion of a scientific economy. 

But the main staple in every art of conduct is repetition and 
considered adaptation, resting upon a continuity of conditions. 
For this part of social conduct science, when sufficiently equipped, 
can and will offer authoritative advice. Throughout all nature 
the arts of conservation and creation run together. The art 
of conservation is the practical function of science: the art of 
creation ever remains a region of beckoning liberty, continually 



SOCIAL SCIENCE AND SOCIAL ART 361 

Limexed by science, and yet undiminished in its size and 
ts appeal. 

' For all experience is an arch where through 
Gleams that untravelled land whose margin fades 
For ever and for ever as we move.' 



INDEX 



Ability, costs of, 53. 

Abstinence, 94. 

Abundance, 161. 

Accidents, increased by fatigue, 67. 

Adulteration, 112, 134. 

Advertising, 218. 

Aged workers, 80. 

Alien immigration, 280. 

Animals, rudimentary industry, 20. 

Arbitration and Conciliation, 277. 

Art, human costs, 44; in industry, 304; 

in the new economy, 314; analysis of 

works of art, 330. 
Averages, defects, 337. 

B 

Bank holidays, 127. 

Bethlehem Steel Works, 205. 

Birth rate, 319. 

Brassey, M., 222. 

Bucher, Industrial Evolution, 23. 

Buckle, M., 114. 

Bureaucracy, its defects, 268; in state 

sociaHsm, 268. 
Business, costs illustrated, 38; human 

costs of management, 54. See also 

Scientific Management. 



Capital, 250 seq.; increase out of income, 
30; economic costs, 89; share in in- 
dustry, 92; sources, 98; maintenance 
of 177; anonymity of, 252; antago- 
nism to labour, 252. 

Carnegie, M., 294. 



Carpenter, Edward, 118, 340. 

Casual labour, earnings, 190. 

Census of Production, 29. 

Chapman, Prof., Work and Wages, 17^. 

Child Labour, 80. 

Children, utility of play, 240-241. 

Chiozza-Money, Things that Matter, 280. 

Charity, 161; its wastefulness, 157; its 
ends, 296. 

Citizenship, necessary leisure, 248. 

Combination, 253; trusts, etc., 276 seq.; 
international, 279. 

Common sense, 321. 

Commercial expansion, effect on con- 
sumption, 122. 

Commercial Treaties, 272. 

Commercialism, vitiates standards, 133. 

Competition, undue stress on, 251; not 
national, 272; restrictions, 276. See 
Combination. 

Consumer, his interests neglected, 257; 
in the co-operative movement, 261; 
conservative habits, no; inequaUties 
in capacity, in. 

Consumption, neglected by economists, 
4; human utility, 37, 106 seq.; class 
standards, 121 seq.; imitative, 130; 
novelties, 129; economy of, 137; in- 
fluenced by prestige, 139; tabular 
statement, 159; scientific, 221; con- 
ventional, 243. 

Conventional standards, 125 seq. 

Cooperation, in division of labour, 251; 
social, 290, 303; in consvmaption, 109. 

Cooperative Movement, 200, 256, 259, 
264. 

Co-partnership, 254 seq. 

Cost, tabular statement, 159. 

Costs of labour, varying incidence, 79; 



3^3 



3^4 



INDEX 



psychical, 219. 

Costs of production, 35 seq., 203; gener- 
al categories, 38 seq. 

Costs of progress, 178. 

Craftsmanship, 69. 

Creative work, 41; under scientific 
management, 219; exemption from 
social control, 292. 

Credit, 57, 345. 

Culture, wasteful expenditure on, 152. 

D 

Dancing, accompanies early industry, 

25- 

Democracy, 170, 241. 

Dietetics, 222. 

Dilettantism, 153. 

Diminishing returns, 315. 

Disinterestedness, 356. 

Distribution, organic law, vi, 157, 237, 
283. See also Consumption. 

Distribution of labour, 164, 311. 

Distribution of leisure, 228. 

Distribution of wealth, 163; actual and 
"hmnan" compared, 176; insufiScient 
share of labour, 178. See also Con- 
sumption. 

Division of labour, 210, 250. 

Drink Bill, 127. 

E 

Early closing, Report, 81. 

Economics, mechanical tradition, 7; 

boundaries of, 8. 
Eden, M., 222. 
Education, false standards of utility, 

152; the place of leisure, 153. 
Efficiency, personal and social, 310 seq. 
Eight-hours day, 231, 349. 
Employment, regularity, 198. 
Environment, effects on consumption, 

120; effect of rapid changes, 129. 
Equality of opportunity, 165. 
Ergograph, 67. 
Eugenics, 316. 



Evolution, of human society, 119, 336 

seq.; instinct and reason, 355. 
Exchange, 3. 



Fabre, Henri, Modern Theory of Instinct, 

352. 
Factories and workshops, 77. 
Family, as unit of consumption, 109, 

222, 242,312, 
Fashion, 139. 

Fatigue, relation to accidents, 67. 
Fatigue, nervous, physiologists on, 65. 
Fatigue, physical biologists on, 63-65. 
Finance, its normal honesty, 57. 
Financial operations, human costs, 56. 
Flux, M., estimate of British income, 29. 
Foreign trade, 273. 
Foster, Sir Michael, Weariness, 63. 
Franklin, Benjamin, 333. 
Free contract, 201. 
Free trade, 272. 
French Revolution, the "general call", 

354- 

G 

Geddes, Prof., 114. 

"General will", 353. 

Genius, undiscovered, 51. 

Gilbreth, F. G., Bricklaying System, 207. 

Gladstone, M., 329. 

Goldmark, Fatigue and Efficiency, 64, 

66,67,81. 
Gould, Jay, 99. 
Guild societies, 266. 

H 

Haldane, Dr., Mechanism, Life oj Per- 
sonality, 18. 

Half-timers, 82. 

Hobson, J. A., The Industrial System, 
189. 

Hours of labour, 231; relation to acci- 
dent, 67; diagrams, 68, 69. 

Hugo, Victor, Quatre-vingi-ireize, 180. 



INDEX 



365 



Imitation, 130; psychology of, 41. 
Imitative work, 60. See also Routine 

work. 
Income, real income, 28 seq.; British 
national, 29; relation to welfare, 31; 
human value, 2)2>\ national income, 
34" 3 5- See also Surplus. 

Individual standards, of consumption, 
136, 158; of production, 311. 

Industrial agreements, 258. 

Industrial conditions, effect on con- 
sumption, 123. 

Industrial efficiency, psychological tests, 
214. See also Scientific Management. 

Industrialism, 242; laissez-faire, 170; ill 
effects, 2go. 

Industry, fabric of, 5; of animals, 20; 
himaan origins, 19 seq.; of primitive 
man, 21; organisation, 161; scientific 
investigation, 225; humanist criticism, 
229; reconstruction, 250 seq.; coop- 
eration and coordination, 303; sum- 
mary of conclusions, 182. 

Insurance, industrial, 104. 

International combines, 279. 

International Postal Union, 281. 

Internationalism, of capital, 274; of 
labour, 274. 

Invention, 41; creative quality, 49. 

Iron and steel, international combine, 
280. 



Jevons, W. S., 5. 



Laboiu-, physical costs, 60 seq.; psychi- 
cal costs, 67; defined, 70; human 
claims, 190. 

Labour Movement, its demand, 190; 
political action, 199; cosmopolitan 
organisation, 275. 

Land, monopoly, 181. See also Rent. 

Le Play, 114. 



Leisure, 228; use of, 237, 246. 
Leisure class, 141; imitated, 155. 
Living wage, 196. 
Luxuries, 122, 245. 

M 

MacCormac, 81. 

McDougall, Social Psychology, 356. 

Machinery, skilled labour required, 72; 

relief afforded by, 76-77; limitations, 

76.^ 
Machine-tending, 70 seq.; human cost, 

61. 
Mal-production, 161. 
Man, social history, 23; evolution, 350. 
Marginal expenditure, 344. 
Marginal preferences, 327, 334. 
Marginalism, 331. 
Marginalist doctrine, 172 seq. 
Market, the, 263. 
Medicine, primitive, 130. 
Mendelieff, 49. 
Migration, of labour, 274. 
Mill, J. S., 326. 
Minimum wage, 197, 347. 
Monetary standard, 29. 
Monopoly, 181, 257. 
Mosso, 64, 66. 

Municipality, as employer, 269, 283. 
Miinsterberg, Prof., 215; Psychology and 

Industrial Efficiency, 212. 
Mutual aid, 304. 

N 

Nation, the, organic structure, 358; 

expenditure, 340. 
National income. See Income. 
Nations, artificial barriers, 272. 
Neurasthenia, 67. 

O 

Organic welfare, vi, 12; relation to na- 
tional income, 32; in consumption, 
161; in state services, 288; in the 
new economy, 301 seq. 



366 



INDEX 



Organic Law of Distribution. See Dis- 
tribulion. 

Output, as wage-basis, 167; limitation 
of individual output, 198; under 
scientific management, 208. 

Overtime, 243. 

Owen, Robert, 222. 



Parasitism, 296. 

Pascal, 350. 

Peel, M. George, Future of England, 238. 

Personal efficiency, 310. 

Personal expenditure, 327 seq. 

Personal liberty, 85. 

Pigou, Prof., Wealth and Welfare, 32, 

174, 338. 
Play, 240. See also Sport. 
Political Economy. See Economics. 
Politics, social science applied, 347; 

quantitative analyses, 167. 
Popular government, share of instinct, 

357- 
Population, 316, 318. 
Poverty, 243. 
Prestige, 139, 150. 
Primitive man, 22, 116, 122. 
Private enterprise, in the new economy, 

293- 

Producer, 257; divergence of group 
interests, 266. 

Production, human costs, 35, 36; crea- 
tive factor, 44; share of labour, 61; 
tabular statement, 159; artistic and 
routine, 303. 

Productive consumption, 123. 

Professional services, 52, 54. 

Profit-sharing, 255. 

Protection, 272, 348. 

Property, 294; an ethical basis, 298. 

R 

Races, 156; in industry, 314. 
Railways, state control, 258. 
Ramsay, Sir W., 49. 



Rent, 38, 171, i8r, 278; individual, 169; 

contribution to capital, 96. 
Reynolds, W. Stephen, 238. 
Ricardo, 60. 

Risks of business, human costs, 89. 
Robertson, J. M., The Evolution of 

Stales, 114. 
Rockefeller, J. D., 99, 294. 
Routine work, 304, 313. 
Rowntree, M., 242. 
Ruskin, John, 9, 12, 46, 62, 106; Munera 

Pulveris, 10; Time and Tide, 313, 316. 



Salary basis, 195. 

Satiety, 161. 

Saving, 92, 102, 104. 

Scientific analysis, 164 seq. 

Scientific Management, 202; increased 
output, 209; human costs, 212, 218; 
Miinsterberg on, 212. 

Seasonal trades, 80, 230. 

Self-governing workshop, 256. 

Smiles, Samuel, t,2,2)- 

Smith, Adam, 60, 186; Wealth of Na- 
tions, 251. 

Social instinct, 351. 

Social science, 322. 

Social service, 283. 

"Social will", 301. 

Socialist state, 97. 

Society, organic structure, 13, 16, 306, 

351- 

Sociology, scope of, 15. 

Sombart, The Jews and Modern Capital- 
ism, 224. 

SpeciaHsation of labour, costs of, 70. 

Speeding-up, 206, 233. 

Sport, 146 seq.; moral standards, 153. 

Standard of comfort, 96. 

Standard of consumption, 343. 

Standard of living, 113, 166; class stand- 
ards, 121; minimum, 168; subsidised 
by the state, 200; science applied, 251; 
standardisation in industry, 202. 



INDEX 



367 



State, the costs of, 178; control of in- 
dustry, 258, 294; as employer, 269, 
283; subsidies, 200. 

State socialism, 268 seq. 

Statistics, limitations, 323. 

Surplus, unproductive, 138, 256. 

Surplus income, of rich, 98; of middle 
class, loi; taxation, 276. 

Surplus profits, 183, 276. 

Survival value, 118. 

Sweated imports, 280. 

Sweated labour, 179. See also Trade 
Boards. 

Syndicalism, 264 seq. 



Tarde, M., 7, 40, 50, 85, 127. 

Tariffs, 272. 

Taxation, 188. 

Taussig, Principles of Economics, 100. 

Taylor, M., Principles of Scientific 

Management, 205, 210. 
Technical instruction, 204. 
Thoreau, 239. 
Trade Board, 197. 
Treves, Prof., 66. 
Trusts. See Combination. 

U 

Under employment, 199. 

Unearned surplus, 96, 187. 

Unemployables, 229. 

Unemployment, 229, 162. 

Unproductive surplus, 181 seq. See also 
Waste. 

Utility, tabular statement, 159; of con- 
sumption, 36, 106 seq., 169, 221-223. 



Value, humanist standard, v, i seq.; 

Ruskin's theory, 9; social standard, 

162; extra scientific standard, 150. 

See also Organic Welfare. 
Veblen, M., Theory of the Leisure Class, 

141. 

W 

Wage Boards, 258. 

Wages, 166; M. Well's analysis, 190; 
piece work or salary, 192; economy 
of high wages, 196; under scientific 
management, 216; real wages, 254; 
under cooperative movement, 259. 

Wallas, M. Graham, Human Nature 
and Politics, 328. 

Wasps, Social instincts, 352. 

Watts, D., 239. 

Watts, G. F., 45- 

Waste, in consimiption, 118 seq.; on 
sport, 159. 

Wealth, 3; Ruskin's view, 9; monetary 
standard, 29; tabular statement, 159. 

Webb, M. Sydney, 190. 

Wicksteed, Common Sense of Political 
Economy, 8, 173, 328. 

Working classes, expenditure, 125 seq.; 
wasteful 'thrift', 179; marginal ex- 
penditure. See also Family, Stand- 
ard of Living, 1 26. 

Women, employment, 82; cost of labour, 
80; in early arts, 25; wages, 191. 

Wordsworth, Wm., 239. 

World state, 274, 280. 



Young, Arthur, 222. 



' I *HE following pages contain advertisements of a 
few of the Macmillan books on kindred subjects. 



NEW BOOKS ON PUBLIC AFFAIRS 

Progressive Democracy 

By HERBERT CROLY 

Author of " The Promise of American Life " 

Cloth, 8vo, $2,00 net 

The object of the author in this book is threefold. He has in the 
first place analyzed the modern progressive democratic movement in 
this coimtry in order to separate its essential from its nonessential in- 
gredients to discover whether there is any real issue between American 
progressivism and American conservatism. In the second place he 
has tried to reconstruct the historical background of progressivism to 
see vifhat roots or lack of roots it has in the American political and 
economic tradition. And finally he has attempted to trace what we may 
reasonably expect from the progressive movement, to show what tools 
it must use in order to carry out its program and what claims it has on 
the support of patriotic Americans. The work seeks, therefore, to 
express for the first time a consistently educational theory of democracy. 

Democracy and Race Friction : A Study 
in Social Ethics 

By JOHN MOFFATT MECKLIN, Ph.D. 

Professor of Philosophy in the University of Pittsburg 

Cloth, j2mo, $1.2^ net 

Professor Mecklin's purpose in this volume is not to present a solu- 
tion of the race problem, which he believes to be insoluble, but rather 
to indicate as clearly as possible what the problem really involves. 
With this end in view he has brought to bear upon the subject the 
results of the work recently done in social psychology by such men as 
Tarde, Baldwin, McDougall, Ross, and others. An analysis of the 
social principles by which the individual lives himself into the lives of 
the group and at the same time attains mental and moral maturity is 
followed by an examination of race traits with special reference to the 
Negro to determine how far they influence the process of becoming 
social and solid with one's fellows. The results thus gained are utilized 
to explain the imperfect way in which the Negro has assimilated the 
civilization of the white and why the color line appears universally where 
whites and blacks are brought together in large numbers. The book 
closes with an attempt at a restatement of the meaning of democracy. 



THE MACMILLAN COMPANY 

Publishers 64-66 Fifth Avenue New York 



The Instinct of Workmanship 

By THORSTEIN VEBLEN 

Lecturer in Economics in the University of Missouri 

Cloth, i2mo, $f.jo net 

A discussion of the effect of labor upon the hu- 
man mind, beginning with the type of savagery 
when men believed that luck or spirits had a great 
deal to do with the success of an undertaking, and 
proceeding to the present time when the machine 
has entirely changed the attitude of man to the 
work which he is doing. In the early times a 
man's work offered him an opportunity for ex- 
pressing his individuality, but at the present time 
he merely seeks to discover the easiest method of 
accomplishing a given result. In this account the 
author ably supports the assertion that workman- 
ship is a human instinct which has been of great 
and perhaps primary importance in the advance 
of civilization. Although an enormous technolog- 
ical advance has been made in recent generations, 
nevertheless the creation of a business class and 
the organization of society on a pecuniary basis 
seem to have made our system of private owner- 
ship now inimical to the encouragement of the 
workmanship instinct. 

The book is full of interesting suggestions bear- 
ing on various questions political, social, and re- 
ligious, as well as economic. At every point the 
author endeavors to throw new light on economic 
theory, and the considerations which he introduces 
seem to bear rather heavily on any economic theory 
which is now accepted, either that of laissez-faire 
or that of the socialists. 



THE MACMILLAN COMPANY 

Publishers 64-66 Fifth Avenue New York 



NEW BOOKS ON PUBLIC AFFAIRS 

Violence and the Labor Movement 

By ROBERT HUNTER 

Author of" Poverty," " Socialists at Work," etc. 

Cloth, i2mo, $1.50 net 

This book deals with the mighty conflict that raged throughout the 
latter part of the last century for possession of the soul of labor. It 
tells of the doctrines and deeds of Bakounin, Netchayeff, Kropotkin, 
Ravachol, Henry, Most arid Caserio. It seeks the causes of such out- 
bursts of rage as occurred at the Haymarket in Chicago in 1886 and are 
now being much discussed as Syndicalism, Haywoodism and Larkin- 
ism. It is a dramatic, historical narrative in which terrorism, anarch- 
ism, syndicalism and socialism are passionately voiced by their greatest 
advocates as they battle over programs, tactics and philosophies. 

Progress! vism and After 

By WILLIAM ENGLISH WALLING 

Author of "The Larger Aspects of Socialism," 
" Socialism As It Is," etc. 

Cloth, i2mo, $1.^0 net 

This is a book which every thoughtful socialist, social reformer and 
those to whom social reform makes any appeal, ought to read. Mr. 
Walling views social and economic questions as a thinker and student, 
never merely as a theorist or partisan. In the political events of the 
last few years Mr. Walling sees much that is significant not only for the 
present but for the future. What the progress of affairs in the next 
generation is to be he outlines in this work in a fashion that is as con- 
vincing as it is unusual from the socialistic standpoint. Of particular 
interest are his analyses of President Wilson, Colonel Roosevelt and 
other prominent leaders, while his description of that which has been 
and that which is to come is trenchant and keen. Whether one agrees 
with his predictions or not, the force and clearness with which the issues 
are indicated distinguish the voliune for all kinds of readers. 



THE MACMILLAN COMPANY 

Publishers 64-66 Fifth Avenue New York 



JVhere and W^hy 

Public Ownership has Failed 

By YVES GUYOT 

Author of " Socialistic Fallacies " 

Editor-in-Chief of the Journal des Economistes , President of the SociSte 
D'Economie Politique of Paris, Member of the American Academy of 
Political and Social Science, Hon. Member of the Royal Statistical Society 
and the Cobden Club of Great Britain, Former Vice-President of the 
Municipal Council of Paris, Deputy to the French Parliament and Minister 
of Public Works, etc., etc. 

Translated from the French by 

H. F. BAKER 

Cloth, i2mo, $1.^0 net; postpaid, $1.63 

What have state ownership and operations accomplished in the way of 
tax and other reforms in those cases where they have been tried ? Yves 
Guyot, statesman, traveler, editor, economist, here answers the questions 
in perhaps the most exhaustive treatise thus far published upon the subject. 

The author believes that neither states nor municipalities should attempt 
tasks especially adapted to individual effort ; in the case of those utilities 
in which the public interest is general, as railways, water, gas, electricity, 
tramways, etc., there must be a physically and morally responsible body, 
accountable to the public on the one hand and the service on the other, 
and protected by contracts against vacillations of public opinion and the 
extortionate demands of interested groups, whether employees, consumers, 
or politicians ; for individuals the watchword should be action ; for local 
and state governments, control. 

A glance at a few of the topics leading to these conclusions is a suffi- 
cient index of the comprehensive character of the work : Municipal 
Activity of the United Kingdom, The United States, Germany, Russia, 
France, Austria-Hungary, Italy, Denmark, Switzerland, Belgium, Sweden; 
State Operation of Railroads ; State and Municipal Bookkeeping and 
Finances ; Private versus Public Initiative ; The Housing of the Working 
Qass ; State and Municipal Extravagance ; Political and Social Conse- 
quences of a Socialist Program. 

" A book that is going to prove useful in these days of more or less 
general and thoughtless talk about public ownership." — Journal of 
Commerce. 



THE MACMILLAN COMPANY 

Publishers 64-66 Fifth Avenue New York 



The Theory of Social Revolutions 

By BROOKS ADAMS 

Author of" The Law of Civilization and Decay," " The New Empire," etc. 

Cloth, izmo, $1.25 net 

" A remarkable work." — The Argonaut. 

" A cleverly written book by a clever man. The argument is that the 
existing social system will soon be changed and that the courts have be- 
come political and not judicial." — Pittsburgh Post. 

"No one interested in either history or politics can afford to neglect 
Mr. Adams' views." — Newark Evening News. 

"... no more fascinating study of a topic so grave is often printed." 
— New York World. 

"... there has not appeared in recent years so calm and determined 
an attack upon judicial legislation." — La Follette^s Magazine. 

"A very stimulating study." — Review of Reviews. 

Labor and Administration 

By JOHN R. COMMONS 

Professor of Political Economy in the University of Wisconsin 

Cloth, i2mo, $1.60 net 

The history of labor laws and strikes has this in common to both — laws 
become dead letters ; the victories of strikes are nibbled away. Some 
philosophers fall back on the individual's moral character. Little, they 
think, can be done by law or unions. There are others who inquire how 
to draft and enforce the laws, how to keep the winnings of strikes — in 
short, how to connect ideals with efficiency. 

These are the awakening questions of the past decade, and the subject 
of this book. Here is a field for the student and economist — not the 
" friend of labor " who paints an abstract workingman, but the utilitarian 
idealist, who sees them all as they are ; not the curious collector of facts 
and statistics, but the one who measures the facts and builds them into a 
foundation and structure. His constructive problem is not so much the 
law and its abstract rights, as administration and its concrete results. 



THE MACMILLAN COMPANY 

Publishers 64-66 Fifth Avenue New York 



